When it comes to car accident settlement, several factors can affect the amount of compensation casualties get. However, if the injuries you suffered hinder you from working or reduce your capacity to earn a living, the loss of income could result in a higher settlement.
Below, we explore the loss income claim, what it is, instances where it can apply, and how to leverage its provisions to secure adequate compensation after a car accident.
What Is Lost Income?
Apart from the popular property damage and medical bills compensation, the law also allows accident victims to claim lost income. This lost income claim covers direct financial losses for money you could have made if the accident hadn't occurred.
If you lose out on income because of a car accident, this legal provision can increase your car accident settlement amount. Although, this will depend on other factors, including:
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The severity of your injuries,
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Length of time you’re unable to work, and
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The type of employment you are in.
What Counts as Lost Income?
While lost income can help secure better compensation, it doesn’t apply in all situations. In law, here are some instances that can count as lost income:
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Missed paychecks: Days you could not work because of the accident
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Business income: Lost profit from business deals and projects you couldn’t deliver due to the accident (Applicable to freelancers, business owners, and gig workers)
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Lost bonuses and promotions: Suppose you were on track for a raise or commission and the accident delayed or prevented it. You can claim compensation for the potential loss.
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Paid time off (PTO): Every employee should enjoy their paid time off. If you had to use vacation or sick days to make up for missed work, you can file a claim for financial loss.
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Long-term earning capacity: Losses on long-term earnings can be calculated into car accident settlements where sustained injuries affect future career growth.
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Overtime, commissions, and bonuses: This is applicable if you regularly earned extra income from overtime, commissions, or side gigs, and the accident prevented you from doing so.
In addition to the highlighted scenarios, lost future income, such as salary increases, career growth, and retirement benefits, may be included in a loss income compensation claim.
How Do You Prove Lost Income?
When it comes to claims and settlements, insurance companies won’t just take your word for it. You have to present clear evidence of lost income and the direct causal relationship with the accident in question.
Suppose you’re filing a lost income claim due to injury sustained from a car accident. In that case, you need a doctor’s report showing the extent of injury suffered and how long your body requires to heal.
Additionally, documents showing your expected income, like the Form W-2, wage, and tax statement, should also be in place. Generally, the more detailed the supportive evidence/documents you provide, the higher your chances of getting fair compensation for your accident-related income loss.
Depending on what you do, here’s a summary of the documents you should prepare for a loss of income settlement:
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Job/Employment Type |
Documents Required |
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Employees |
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Freelancers and business owners |
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Do You Need an Attorney to Help You Claim Your Lost Income?
You do not need an attorney to file a claim for loss of income. However, engaging an attorney can make a huge difference in the amount of loss income compensation you get, or whether you’ll even be compensated at all.
Insurance companies frequently try to reduce or deny lost income claims by questioning the severity of your injuries. They may even argue you could have returned to work earlier. If you’re self-employed, they may challenge your profit claims, no matter how little they may be.
That is why it is advisable to engage the services of an experienced attorney. Apart from ensuring all your losses are accounted for, an attorney will also work with financial and medical experts to obtain all the requisite medical reports for fair compensation.
Conclusion
Whether you’re an employee or run your own business, a loss of income claim can get you additional compensation. Insurance companies often try to minimize payouts, so you must provide vital evidence to support your claim beyond any doubt.
Enlisting help from an attorney is best, especially if you are not law-savvy. An attorney can help identify and gather all the necessary evidence, negotiate a fair settlement, and ensure you receive the appropriate compensation.
