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Loss of Wages Claim
This could be one of the most difficult claims to make
To have a valid loss of wages claim, you must have documentation of the actual loss. It does not matter whether you are the insured or the claimant. You will be responsible for providing the information to the insurance company.
If you work for an employer, just documenting your hourly wage and/or the days you were incapacitated will be sufficient for a successful loss of wages claim.
The insurance company will usually send you a medical authorization form (to find out who your current medical providers are) and an employment authorization form (a form where you express consent to have the insurance company contact your employer and allow your employer to give detailed information regarding their employment and/or compensation rate).
If the adjuster does not send you or give you this form, you need to ask for it. It tends to make things much easier for you when it comes to settlement.
However, you must read carefully the medical authorization form they send you. The language of these forms is very broad and you should restrict it.
The form gives the insurance company complete and unrestricted access to ALL your medical history (which can be very intrusive and probably more than you would like them to see).
Documentation from your doctor that supports your inability to work must go on the record.
This will allow the insurance adjuster to document and pay your loss of wages claim. If you do not have a doctor’s note, then you could face some difficulties in trying to get your wages paid.
Adjusters are known for wanting to shortchange you in every way they can. They can have their supervisors breathe down your neck so you are pressured to settle as low as possible. Insurance adjusters will be calling your workplace to double check your pay rate.
Many times, you simply do not want to hassle your boss. You don’t want your boss to just go on answering calls from a random adjuster asking for your pay rate.
Insurance adjusters will try to discourage you from making any type of claim. Telling you that they will contact your boss is a subtle way to discourage you from arguing loss of wages.
Remember that your boss has a duty to you. Documenting a loss of wages claim is not very difficult for any employer and should only take a couple of minutes. Do not let the insurance adjuster discourage you from making this claim.
What happens if you were on vacation? Does the loss of wages claim still exist?
This is an interesting question.
The objective of insurance (and tort law for that matter) is to place the injured party in the position they would have been in had the accident never happened.
It is impossible to do this. No one or nothing can ever give you back the time you lost pain free. However, the insurance company must do the best they can to get you as close as they can to that pre-accident condition.
So if you are in a vacation, were there any wages lost? The answer is, of course, no wages were lost. Many insurance companies would deny the claim based on that theory. Luckily, courts have changed that! If you are injured and you are taking your vacation time, you would not be able to enjoy your vacation the way you planned (with back and neck pain).
The courts have agreed that insurance companies should pay for the days that you could not do the normal activities you were planning to do in a vacation at the rate you would have been paid if you were at work.
If you receive double payment (one because you are in a paid vacation and two from the insurance company in your loss of wages claim) then you will get a windfall.
However, it does not matter. You have now lost your vacation time (your employer will not give you another paid week to go to Disneyland because you had an accident).
Loss of wages for independent contractors, employees in commission and for the self-employed.
These are the most complicated form of wage loss claims. Really, this can become the biggest headache of the entire claim. Forget about pain and suffering and the total loss of the car, loss of wages can be very hard to prove under these circumstances.
The reason for this is because you do not have a boss that can verify your income. I know this is unfair, but the insurance company will not just take your word for it.
It is hard to calculate income. A Realtor that does not sell a house could claim that his entire commission was lost due to the car accident. Consequently, claims adjusters will quickly point out that normally a house takes time to sell and that it typically takes 30 days to close a deal.
The adjuster will be trying to show that the accident did not cause the loss of the commission. Under most circumstances, the insurance company will prevail with this argument.
The independent contractor and the self-employed have similar difficulties. Did they lose a job in which they would have made $3,000 because of the accident? Or was it for any other reason? Most of the time a deal is not completely lost because of one missed appointment.
A similar circumstance occurs with ongoing projects. Was the contractor unable to finish the work because of the injury? The contractor must show by preponderance of the evidence that the injury caused the delay of the work. But the fight would not be over that instant, the insurance company will seek protection under the legal concept of mitigation of damages.
What did the contractor do so that the delay on the contract was not significant? Why did she/he not hire someone to finish the job on time? Believe it or not, the law will put an affirmative duty on you to make sure your responsibilities are fulfilled so you avoid waste (protect the person that hit you).
The insurance company will make you document all lost wages and if you do not have documentation, then they will not pay you. Even if you can prove that you had loss of wages, they will still ask if you mitigated your damages so they can deduct even more if you were unable to mitigate further loss.
If you cannot possibly provide documentation of your projected income or your actual loss, you could show your federal income tax return. Only show the pages that are relevant, you do not have to show them the entire document so they won’t see things you do not want them to see.
This way you could add up what you made in a year and divide that by the amount of workable days (not 365 days since you did not work every single day the prior year). This will give you the average income per day and give you a rough estimate of your income per day.
If the prior year was not a good year (say you had slow sales), then provide three or five years of federal income taxes.
Show them that you made more than they are willing to offer you.
The limitations are rather severe in loss of wages claims. If you are making a claim against your own insurance company, then you will be subject to a very low limit ($40 dollars per day) or you will be compensated at $8 every $10.
If you are making a claim for loss of wages against someone else’s insurance company, then no limits would apply (only the limits of liability of that person who purchased the policy would apply).
However, there is one more caveat. The wage loss must be related to the injury. In other words, if you had a car that was a total loss and you had to spend days finding a rental car (away from your workplace), this would not be valid wage loss claim (at least in the eyes of the claim adjuster). They will only pay if you physically could not work.
Again remember this, the fact that the insurance company does not want to pay for lost wages even if it were related to a car accident does not mean that you cannot successfully claim this in a court of law.
Personal Injury eBook
Follow the links below for more information about accident injuries, bodily injury claims, and what to ask when making this type of claim.
4. Permanent Injury Claim
5. Medical bills, medicine, expenses
6. Loss of Wages
7. Loss of Earning Capacity
8. Loss of Business Income
9. Loss of Consortium
10. Loss of Quality of Life
11. Loss of Essential Services
12. Future Treatment and Expenses
13. Pain and Suffering
14. Prior Injuries
15. Psychological Injuries
16. Personal Injury Claim Settlement (evaluation of a claim)
17. Car Accident Injury Claim and Burden of Proof
18. What affects compensation for back and other injury claims
19. A word about Head Injuries
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