Does Car Insurance Pay for Lost Wages?
Last Updated on March 6, 2020
A car accident can dramatically affect your overall quality of life. If you are seriously injured in a car accident, you may not be able to work. Depending on where you work and your employer’s policies for taking time off, you may lose wages and not be able to support yourself. Most car insurance policies will cover lost wages to compensate for any time you might have to take off work.
When Will Insurance Companies Cover Lost Wages?
Most insurance companies will pay for lost wages as long as they happen as a direct result of the accident. Everyone is required to have basic liability coverage, and these policies almost always cover lost wages. If you are found at fault for the accident, your liability policy will pay for the damages. If the other party is found at fault, you will receive a payout from their insurance. Partial fault accidents are very common, as there are many instances where both parties contribute to the accident. In this case, the liability policies will split the overall cost.
However, there are specific types of insurance policies that are designed to cover the cost of injuries. Personal injury protection coverage is required in many states and is offered as an option in all others. This coverage pays for any costs that happen as a result of your injury, regardless of who is found at fault in the accident. You may also be able to recover lost wages if you have uninsured motorist coverage. This type of policy covers you if you are hit by someone who doesn’t have car insurance or doesn’t have enough financial coverage to pay for the accident.
Are There Any Circumstances Where I Cannot Recover Lost Wages?
Most insurance companies will pay for any wages you lose as a result of an accident. However, if you have particularly cheap insurance, there may be an exclusion in your policy for lost wages. You should always read your policy in detail and ask to make sure you know exactly what is covered. Consider paying a little more to ensure you’re covered if you can’t work – although your monthly cost may be a few dollars higher, it can save you from a very challenging financial situation later on.
You should also keep in mind that your insurance will only cover you up to the limits of your policy. For example, if you have $20,000 of personal injury protection coverage, but you cannot work for several months and lose $25,000 in wages, you won’t be covered for that extra $5,000 above your policy limit. You may want to consider purchasing more than the legally required amount of car insurance to make sure you’re protected no matter what happens.
How Do I Prove Lost Wages to My Insurance Company?
In order to file a lost wages claim, you’ll need to prove to your insurance company that you missed work as a result of injuries from a car accident. After the accident, start documenting all the ways that the injury is affecting your life. Keep a written statement where you detail every aspect of your injury – the more detailed you can be, the easier it is for insurance adjusters to understand what happened and pay out your claim appropriately.
You’ll also need to collect a number of documents to give to your insurance company after the accident. For example, you’ll need a note from your doctor detailing the severity of your injuries. You’ll also need a note from your employer to confirm that you are not able to work and that you aren’t being compensated. This note should specify how long you have not been able to work and how much money you are losing. You’ll also need to provide a tax return or pay stubs to corroborate this information about your income. Finally, you’ll need to provide a police report detailing what happened during the accident and your initial injuries.
Keep in mind that your employer may be able to provide compensation for you if you’re injured. Check to see if you have any paid sick days or paid time off available before filing an insurance claim. If your employer has these options, you may be able to take the time off you need without worrying about your paycheck.
How Can I Support Myself While Waiting for an Insurance Payout?
While car insurance does cover lost wages, it can take several months for your claim to be finalized. This means you might not receive your payout for a very long time after the accident. If you aren’t able to work, you’ll need to find another source of income in the meantime. Here are some options to consider if you’re in crisis.
- If you’re very confident about the insurance payout you’re going to receive, consider taking out a loan or using credit to support yourself temporarily. You can then pay back the loan or credit line in full once your insurance payment comes through. However, the downside with this is that you will need to pay interest, and it can affect your credit score if you don’t pay the loan back on time.
- Depending on the severity of your injury, you may also be able to apply for disability payments. While disability can also take some time to process, you might get support faster while waiting for your insurance. Keep in mind that there are strict requirements to qualify for disability, so not everyone will be able to use it.
- If your job doesn’t require physical labor, ask your employer if you can work from home. This can minimize the amount of time you need to take off work, and allow you to physically recover while still making money.