If you experience a car accident, you may not know what to do afterward. Once you tell the police what happened and get your car to the mechanic for repairs, you may have to seek medical attention. Maybe you won’t have any more than some bumps and bruises, but perhaps you will have more serious injuries that will force you to miss work for a while.
If that happens, you will probably need to look into recovering lost wages. That can seem complicated when you’re trying to navigate all the rules and laws surrounding such situations. You’ll need to know the tax rules for damages awarded for lost wages and follow them. If you don’t, you might face stiff penalties sometime down the line.
Let’s talk about the steps that go into recovering lost wages after a car accident. You never know when you might face this situation, so preparing yourself makes sense.
Who Pays for Your Lost Wages After a Car Accident?
First, you need to understand who pays for your lost wages after a vehicular accident. If you’re in a car crash, and you don’t suffer any injuries or only minor ones, then presumably, you won’t miss any work. If your vehicle sustained damage, but you did not, then hopefully, you can still get to work via public transportation, or you can have someone drive you.
If you sustained some serious injuries, though, and you’ll miss some time, then you need to recover those lost wages. You usually can’t do so through worker’s comp. Worker’s compensation kicks in if you injure yourself while on the job. That only applies in this case if you injured yourself in a car wreck while driving somewhere for your company.
In short, in most instances, either your car insurance or the other driver’s car insurance will cover your lost wages after a vehicular accident that injured you. You must determine whether your car insurance or the other driver’s insurance policy should cover those lost wages.
To get the answer, you need to learn whether you’re in an at-fault or no-fault car accident state. You must also determine who caused the accident.
The Laws Vary in Each State
There’s no single set of laws about insurance policies that govern the entire United States. Instead, each state has its own laws.
Let’s use New York State as an example. In New York state, each driver must carry at least $50K in no-fault insurance. That’s because New York has no-fault car accident status.
That means if you’re in a car wreck, and you must miss work while you recover, then your insurance policy should cover your lost wages, as well as vehicle repairs and doctor bills, in most instances. The insurance industry calls all these “economic losses.”
That’s why you will need to fill out a claim with your insurance company, even if you feel certain that the other driver caused the wreck. If you live in an at-fault state, that’s different. In that scenario, you would need to file a claim with the other motorist’s insurance company if you believe they caused the accident.
What Happens When You File a Claim with Your Insurance Company?
Let’s again use New York state as an example, where you must carry $50K in no-fault insurance as a driver. You can also have a policy worth more than that, but such policies usually cost more.
Let’s say you have a minimum amount of $50K. After the crash, you must file a claim with your insurance company the first chance you get. You will need to give them as much documentation as you can in order to start payments coming your way that will cover things like lost wages, as well as the other economic losses we mentioned.
You will need to send the insurance company information. That might include medical records that prove your injury. Your doctor can probably give you all of that.
You will also need proof of how much money you normally make at work so that your insurance company can start covering that during your recovery period as well. An official letter from your employer should help. You might also provide a W2. Pay stubs and tax returns can also help.
You’re trying to show, through all of this documentation, exactly how much money the insurance company should pay you. You will also need to continually establish that you’re missing work until you can get back to your job.
That might take days, weeks, or even months. If the car wreck injured you more severely, then obviously you will need more money and payments than if you missed just a couple of days.
Do You Need a Lawyer?
Usually, the more documentation you provide, the less likely your insurance company will give you any trouble when you’re trying to collect a payout. However, you may occasionally have a scenario where your insurance company won’t pay you.
If that happens, maybe they’ve found some technicality, and they’re using it to say they don’t owe you any money. It’s unfortunate, but some insurance companies might use delaying tactics or try to give you less money than you deserve. That may happen even if you give them sufficient paperwork that proves your injuries and establishes how much money you normally earn.
If this happens, then you may need to hire a lawyer who knows about this area of the law. They can go after your insurance company and hopefully get you the money you need.
You should also understand that if a car accident seriously injures you and you miss work for quite some time, then you may exhaust the total amount of the insurance policy. For example, if you have that $50K policy we mentioned earlier, and that runs out, the insurance company must legally give you no more than that. That’s why getting a more valuable policy might make sense.
