Who pays my lost wages after an automobile accident?
The answer to that question depends on the coverage you purchased on your own automobile insurance policy. Unlike medical auto insurance benefits, which must, by law, be a minimum of $5,000, lost wage insurance is not mandatory but optional under Pennsylvania law.
If you are losing income because of an auto accident, contact KBG Injury Law. We can quickly determine whether you have lost wage insurance by examining your insurance declaration page.
Are You Worried About Lost Wages From a Car Accident?
After a car accident, lost wages are the biggest concern aside from medical bills. Most Pennsylvania residents need to earn income to pay the bills. If you have children or dependents, paying can be especially important. It can be stressful to have no income and to be injured from an accident, and returning to work too early can put you at risk of reinjury.
If you are concerned about lost wages, consider the following steps:
- Try to reduce your risk of income loss: Before you are ever in a traffic collision, take steps to reduce your risk of financial distress if one were to occur. Try to pay down your debts and create an emergency fund that can pay for three to six months of bills. Create a budget and financial plan in case you ever have an emergency so you know what to do if your income is suddenly gone. Find a passive form of income and choose your insurance wisely so you have financial resources if you cannot work after a collision.
- Understand your sources of income: If you are injured and cannot work after a collision, consider your benefit options. Does your workplace offer disability benefits or sick days? Would you qualify after an accident, and if so, how many days are covered? If you sustain injuries in an accident in the company car, does workers’ compensation cover you? Find out how much you can expect from different benefits and when they might begin.
- Contact an attorney if you have sustained injuries in an accident: If you are injured in a crash, contact KBG Injury Law for a consultation. Many of our attorneys have experience in the insurance sector, and all of them have trial and litigation experience. Our legal team will tell you what is and is not covered by your policy and work to ensure you get the benefits you are entitled to.
- Get wage-loss-benefit insurance now: Wage-loss benefits ensure some of your wages are covered and you have a source of financial support after an accident so you can pay for essentials. Shop around for affordable coverage and get at least $1,000 per month in wage-loss benefits. If you have a high income, debts, dependants or high expenses, get coverage close to your after-tax monthly income — it is one of the best things you can do to protect yourself from wage loss after a collision.
How Does Lost-Wage Insurance Work?
As the name suggests, lost-wage insurance covers you in case you are in an accident and cannot work. If you are injured and cannot return to your job, benefits help you pay for bills, groceries, rent and other necessities.
Just like with medical bills benefit, if you purchased lost-wages protection, you are entitled to this coverage, regardless of who is at fault in the accident. Pennsylvania law requires that your insurance company pay you 80% of your gross lost wages, excluding the first five days you are off work, up to the amount of your policy limits that you purchased.
Consider an example. Say you purchase wage-loss coverage of up to $1,000 per month with an overall limit of $5,000, and that you work 40 hours per week, ad make about $500 gross per week. Assume your auto injuries cause you to be off work for five weeks. Under Pennsylvania law, the first week you are off would not be the responsibility of your own auto insurance. The next four weeks you are off, if you lost a total of about $2,000 in gross wages, Pennsylvania law says that you take 80% of those gross wages lost, which equals about $1,600, and you receive that payment from your own insurance company only to the extent that you have purchased sufficient coverage.
So, in our example, because you purchased lost-wage coverage with a limit of $1,000 a month and $5,000 overall, you would only be entitled to $1,000 from your own insurance company for the month that you were off work after the five day waiting period. If you had instead purchased wage-lost coverage with a larger benefit of $2,500 per month, then your insurance company would have to pay the full $1,600 representing 80% of your lost wages. Just as with medical benefits, your insurance company cannot penalize you or raise your rates for using your lost-wage coverage for an accident that was not your fault. Any lost wages not covered by your own insurance company can often be presented as part of a claim against a driver who causes an accident.
If you have any more questions or concerns, please call us at KBG Injury Law for a free consultation.