Car Accidents and Loss of Earnings

Car accidents are costly for accident victims. Financial damages in an injury accident go far beyond just property damage and medical bills. If you get injured in an accident, you may not be able to go to work. You may never be able to do the same work again if you have serious injuries. If you lose income because of a car accident, you should get compensation for your losses.

Loss of earnings is an appropriate damage claim option for serious car accident injuries. This allows you to get lost compensation for a future loss of income. Damages in a personal injury claim can depend on state law. Talk to a car accident attorney to understand what lost income you can recover in a personal injury lawsuit.

What Is Loss of Earnings? 

Loss of earnings (LOE) is a type of economic damage in a personal injury claim. If you cannot return to work because of an injury, you may lose out on future earning potential. Loss of earnings compensation is a way to compensate for the money you can no longer earn because of the injury.

For example, a plumber makes $60,000 a year. The plumber is permanently disabled after an auto accident. For the rest of the plumber’s life, they will no longer be able to earn the income they would if they were not injured. The future lost income is their loss of earnings.

What Lost Income Is Recoverable in a Car Accident Claim?

In a personal injury case, the accident victim seeks damages from the at-fault driver. Damages in a personal injury claim include economic damages and non-economic damages. Non-economic damages can consist of losses caused by pain and suffering.

Economic damages are the financial losses associated with an accident. This includes current losses and future damages. Economic damages can include:

• Medical expenses
• Property damage
• Lost wages
• Future medical treatment
• Loss of future earnings

How Do You Calculate Lost Earnings After a Car Accident?

Lost earnings are based on future losses. This can make it challenging to calculate your earning capacity for the future when you are not exactly sure how much you may earn. Generally, potential lost earnings will depend on your current earnings. You can show your current lost wages in a car accident based on your pay stubs and tax returns.

Current losses for missing work help project what you would have earned if the accident had never happened. When calculating lost wages, include all types of compensation and losses. Your current lost wages claim may include:

• Hourly wages or salary
• Paid time off (PTO)
• Sick days
• Vacation days
• Benefits
• Bonuses and commissions

How Do You Prove Loss of Earnings? 

You have to show the extent of your injuries to show that you will lose your earnings in the future. If you suffer minor injuries, you may only be out of work for a few weeks. However, if you suffer permanent disability, you may be unable to work for an extended period of time.

Your attorney may use expert testimony based on your medical records to prove physical injuries and disabilities. A medical expert can testify to the jury about the cause and extent of your injuries. The expert can also explain how your injuries may prevent you from doing the tasks required for your job.

A financial expert can then estimate your future lost earnings. There are forensic economists, financial analysts, and occupational experts who can estimate your future lost earnings. These experts will use the available information to make economic earnings projections. Factors may include:

• Education and training
• Profession or trade
• Market wage rates
• Wage growth estimates
• Geographic location

An expert may present a range of future calculations. The at-fault driver’s insurance company may present its own expert. The jury would then decide what they believe the injury victim should recover in a damages award.

Is There a Limit to Loss of Earnings Damages in a Car Accident Case? 

In some states, there is a limit to the amount of non-economic damages you can recover. However, there is generally no strict limit to economic damages caused by an accident. A jury typically determines loss of earnings damages.

Limits to economic damages are based on what is reasonable. For example, you are self-employed, earning $50,000 a year. You claim that you wanted to become a doctor, making $500,000 a year in the future. A jury may not believe that is reasonable. However, if you were about to graduate medical school in a particular field, the jury may think you would earn a reasonable doctor’s income.

Can I Recover Loss of Earnings if the Other Driver Doesn’t Have Insurance?

If the other driver doesn’t have insurance, you can only recover based on how much they can pay. If you have uninsured motorist insurance, your damages can only go up to the amount of coverage in your insurance policy.

Some states have no-fault car insurance liability. With personal injury protection (PIP), your insurance policy pays for your own property damage and personal injury losses. In PIP states, the limit to your loss of earnings claim only goes up to your insurance coverage limits.

How Can I Recover Lost Earnings After a Car Accident? 

After an injury car accident, the insurance company may try to offer you a settlement offer to resolve the insurance claim. Before accepting a settlement, make sure the money will cover all your damages. A settlement should cover your past, current, and future damages.

A personal injury attorney can negotiate with the insurance adjuster to get you total compensation, including lost earnings. Contact an experienced car accident attorney for legal advice about recovering lost earnings after an auto accident.