After a car accident, your insurance company and perhaps even your personal injury attorney will focus heavily on the physical and mental suffering you endured. To an extent, that makes a lot of sense. For weeks, months, or years, your mind and body went through Hell, and your medical expenses and pain and suffering create a large portion of your personal injury claim. After an auto collision, there are many areas that make up your damages. One area that often gets under looked and undervalued, is wage loss.
What is Wage Loss?
This seems like a simple question that should produce a simple answer. Unfortunately, the law and the insurance industry have created complicated rules that serve to protect the injured party and raise havoc simultaneously. First, the legal process distinguishes between wages you have already lost and wages you have yet to lose. This first part makes sense. If you were involved in a car accident and needed surgery, you likely also needed to take a few weeks or more off for physical therapy and recovery. If all that time off has already occurred, that forms your past wage loss. If you make your claim with the knowledge that you will be having surgery in the future, and your doctors can opine that you will not be able to work for one month after the surgery, that forms your future wage loss.
The simplest scenario occurs when the injured party works for an hourly rate of pay. If I make $15 per hour and work 40 hours per week, it easy to compute six weeks of lost wages with simple multiplication. ($15 dollars per hour) x (40 hours per week) x (six weeks) = $3,600 in wage loss. What happens if you are paid a salary. While you certainly missed time from work because of the car accident, perhaps you weren’t docked any pay. Are you entitled to compensation in that scenario? If you were forced to use sick leave, vacation time, or any other days off you had stored as a result of the collision, you may be entitled to compensation from the at-fault party.
This is referred to as the “collateral source doctrine.” In Washington, the at-fault party cannot benefit from previous arrangements you made with employers, insurance companies, or even the state of Washington (regarding L&I, Medicare, etc.). The state and the courts agree that you should not need to use your sick days due to another person’s negligence. You may be entitled to a pro rata claim for your lost wages related to the sick days you were forced to take. For example, if you make $50,000 per year and you used 10-sick days after a crash, you may be entitled to claim $1,369.86, which represents 10/365ths of your annual salary.
If you’re working with the insurance company, don’t forget about pay bonuses or other employment perks and benefits that you could not use due to your car accident related injuries.
How Do You Prove Wage Loss?
Having a wage loss claim and establishing your wage loss claim are two separate beasts. Even if you missed time from work, if you have no documentation or testimony to support your claim, a jury might find it difficult to award you lost wages. There are a few simple steps you can take during your injury claim to make sure insurance companies don’t ignore your wage loss claim completely.
When it comes to wage loss, you are entitled to fair compensation for time off that you would not have required but for the car accident. Be genuine, however. Juries can smell greed a mile away. If you “decide” not to work for six months because your back hurts a bit, it may come back to haunt you later when the jury learns that you were able to go work out in your garden or even take a trip to the mall without complaints. At the law office of Magnuson Lowell P.S., we are dedicated to helping our clients recoup the money they are owed. Call today for a free consultation (425)885-7500.
There’s no doubt about it – auto insurance is confusing. And, you know what? Car insurance companies use confusing jargon, longwinded definitions, and niche exceptions to create an even greater power imbalance. The worst thing a driver can run into after a motor vehicle accident is the realization that they (or the driver who hit them) doesn’t have the insurance necessary to cover your claim. To protect yourself, your family, your assets, and your fellow drivers, sitting down with a qualified and experienced auto insurance agent can mean the difference between minimum coverage and the insurance coverage you truly need.
One of the most important but least discussed areas of car insurance is underinsured motorist coverage. The first point of confusion regarding underinsured motorist coverage is that there are several different monikers used by insurance companies that ultimately mean the same thing. Uninsured motorist coverage is also known as uninsured motorist coverage, UM coverage, and UIM coverage. Regardless of the name, underinsured motorist coverage is an important insurance tool to help protect you and your family after car accidents.
Let’s start with the basics, just what is underinsured motorist protection? Generally, UM insurance provides a floating layer of coverage that protects you after a car accident if the at-fault driver has no insurance or insufficient insurance to cover your damages.
Here’s an easy example. In Washington, the minimum liability limits a driver is required by law to carry is $25,000. If you are rear-ended by a driver carrying a minimum limits policy, that is the most money you can get from the at-fault driver’s insurance company. Moreover, the only way to get more money would be to win a judgment against the at-fault driver and collect the money against property or via a garnishment. Let’s say you broke your leg in the crash and ended up with $42,000 in medical bills. The at-fault driver’s insurance company offered you their available $25,000, but the at-fault driver is a single mother with no money to spare. What now?
This is where underinsured motorist insurance is a lifesaver. UM coverage “steps into the shoes” of the at-fault driver. In other words, your own auto insurance company must now provide you insurance under the UM coverage to supplement the liability limits of the at-fault driver. Let’s say – for example – you have a $100,000 underinsured motorist policy. If that’s the case, you obtained $25,000 directly from the at-fault driver’s insurance, and your own car insurance company will pay for your related damages up until the full value of the policy. In this case an additional $100,000.
The next question then becomes, do you need underinsured motorist insurance? Simply, in our opinion, yes. Firstly, UM insurance is relatively inexpensive because it the policy only activates when you are injured in a car accident and the at-fault driver has no insurance or insufficient liability insurance. Second, given the number of drivers carrying Washington’s state minimum liability insurance (and trust us, it’s more than you would think), providing yourself an extra floating layer of insurance is a no brainer.
Here’s a real-world example of how underinsured motorist insurance can save the day. A former client – we’ll call him Bob – was a passenger in a vehicle rear-ended on the freeway. His car was smashed into the vehicle in front. Glass shards from the broken windows hit his eye causing partial blindness. The at-fault driver had the state minimum liability insurance totaling $25,000. Needless to say, that insurance company paid the full value of its policy immediately. The at-fault driver was a part-time college student working as a barista to make ends meet. Bob was forced to make a UM claim against his auto insurance in order to get his medical bills paid and compensate him for his injury. Fortunately, Bob was smart, and he purchased a $500,000 underinsured motorist policy. After negotiating with the insurance company, Bob eventually walked away with the full limits of his own policy, as well.
Now, this is not to say that Bob was happy. He would have much rather had his full vision back. However, walking away with $525,000 was much, much better than the minimum $25,000 provided by the at-fault driver’s insurance company. Insurance can be incredibly confusing, and insurance companies use their knowledge of the industry to manipulate claims, downplay injuries, and leverage small settlements. Making sure you have all the coverage you need is one small way to ensure that you and your family stay safe on the road.
At the law office of Magnuson Lowell P.S., we strive to help you understand your insurance policy. Education is the key to informed decision-making. So, whether it’s sitting down with your insurance agent or with an attorney, make sure you know what you’re buying and buying what you need. Feel free to call for a free consultation (425)885-7500.
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