A car accident can throw your life and finances into turmoil. If you’ve suffered an injury, you may be prevented from working for several weeks, months, or even longer. This unexpected loss of income combined with mounting medical bills sometimes leaves accident victims struggling to make ends meet.

Fortunately, you can include lost wages in any settlement you seek to recover from the at-fault driver. This may include any form of income or work-related benefits you’ve missed out on because of your injuries.

You can also seek to recover compensation for future lost wages if you’ve become disabled or otherwise had your long-term earning capacity reduced. In this article, we’ll lay out who pays for your lost wages, what you can include in your lost income damages, how to prove the value of these damages, and how a car accident lawyer can help you recover full and fair compensation.

Who Pays for Your Lost Wages?

When it comes to car insurance, Texas is an at-fault state. This means that following a car accident, you may claim damages from the insurance company of the driver who was responsible for your injuries.

Some accidents have multiple vehicles and negligent parties involved. In these more complex cases, you may seek compensation for lost wages from the insurance policies of all the negligent parties.

When pursuing compensation from another driver’s insurance company, you’ll need to prove the other driver’s liability for the accident and your injuries. You’ll also need to provide evidence to support the full value of your lost income damages.

Filing a Lawsuit Against the Other Driver

While most car accident claims are settled out of court by the insurance company, it occasionally becomes necessary to file a personal injury lawsuit against the other driver directly. Your car accident attorney may advise such a lawsuit if you’ve suffered severe injuries resulting in extensive lost wages that exceed the insurance policy limits.

You might also have cause to file a lawsuit if the insurance company is disputing your car accident claim and refusing to pay a fair legal settlement. In this situation, your attorney can prepare evidence and expert witnesses to persuade the jury to award a court-ordered payout for your lost wages.

Another potential reason to take your case to court is if the other driver was acting with gross negligence such as drunk driving or knowingly operating an unsafe vehicle. In this situation, you may be able to win punitive damages in addition to your lost wages, medical treatment damages, and other damages.

Recovering Lost Wages From the Other Driver’s Employer

Recovering compensation for lost wages directly from the negligent driver may be hard if your damages are significant and the at-fault driver doesn’t have enough funds. But if the negligent driver was working for a trucking company or driving another kind of commercial vehicle such as a taxi, bus, or delivery van, you may be able to sue the driver’s employer.

A company or other large organization is more likely to have sufficient funds to cover your damages in full. But they’re also more likely to have strong legal teams, so you’ll need an experienced trial lawyer fighting your corner in court.

Making a Claim With Your Own Insurance Provider

When the limits on other driver’s insurance coverage aren’t high enough to cover your lost wages and other damages, your own insurance company may be able to make up the difference. This could also be the best option if the other driver doesn’t have car insurance. To get reimbursed for lost wages by your own auto insurance provider, your policy will need to include underinsured motorist coverage, and your personal injury lawyer will still need to prove liability and damages.

Short-Term Solutions for Your Lost Income

Following an auto accident, personal injury claims usually take several months to resolve. With more severe injuries or exceedingly complex cases, it may take over a year.

You’ll only receive money for lost wages and other damages once a settlement agreement is reached and delivered. Until then, you’ll need to find other ways to cover your medical costs and living expenses.

To help with your finances until your lost wages claim is completed, you may be able to use the Personal Injury Protection included in your auto insurance policy. If you’ve purchased accident insurance or disability insurance, or your work provides this kind of coverage, that may be another option.

Sometimes these short-term coverage options will require a lien on your final settlement with the at-fault driver. This means they’ll take a portion of your final car accident claim settlement to reimburse their payouts. It’s best to have your car accident attorney negotiate the terms of any such lien arrangement with insurance companies and medical providers.

Social Security Disability Insurance

You may also be able to claim Social Security Disability Insurance (SSDI), provided that you meet certain eligibility criteria and you or a family member have made sufficient social security contributions over the years. SSDI typically provides monthly payments to eligible individuals who are unable to work for a year or more because of their disability.

The waiting period for SSDI tends to be rather long: five months or more. Even though SSDI can provide back-dated payments covering your living costs for a period of 12 months prior to your application, five months is still a long time to wait without any income, so you may still need to find further financing solutions.

Supplemental Security Income

Another federally funded option may be Supplemental Security Income (SSI), which also provides basic financial assistance to eligible individuals with a disability. The primary difference between SSI and SSDI is that SSI eligibility criteria are based purely on disability, age, and limited income and resources: it’s not necessary to have previously made contributions while you were working. Your attorney can advise you on which government agencies may be able to help with your short-term finances until the final settlement comes through.

What To Include in Your Lost Income Damages

Recovering lost wages after a car accident can include a lost hourly wage, salary, commissions, bonuses, tips, and any other payment structure you might have. Your lost wages claim may also include any paid time off and other benefits or perks you usually receive while working.

Bear in mind that the purpose of a lost wages claim is to make you whole: your financial situation should be returned to exactly how it would have been if the car accident had never happened. As such, the at-fault driver’s insurance company should ideally cover everything you’ve missed out on, down to free meals at the company cafeteria. Here are some of the losses you might include in your lost income damages after an auto accident.

Hourly Wage

Almost 60% of American workers are paid an hourly wage. Calculating your damages for a lost hourly wage is usually quite straightforward.

You simply multiply your usual hourly wage by the number of hours that you missed as a result of your injuries. For example, a car accident victim with a $25 hourly wage who missed 100 hours of work would claim $2,500 in lost income damages (plus extra potential work-related losses, as outlined below).

Annual Salary

If you receive an annual salary, you also need to work out how much income you lost for each hour you were kept away from work. To begin this calculation, divide your total annual salary by 2,080, which is the total number of weekday work hours in a year. Then multiply this figure by the number of hours you were kept away from work.

For example, if your annual salary was $50,000, your hourly rate would be $24 ($50,000 / 2,080 hours = $24 per hour). If you were kept away from work for 40 hours, you would claim $960 in lost wages ($24 x 40 days = $960).

Overtime Pay

You can also claim lost wages for any overtime you missed out on. You should be able to prove missed overtime hours with previous pay stubs that show a consistent overtime pay pattern.

Some jobs involve a lot of overtime at certain times of the year, such as tax accountants, cruise ship workers, tour guides, chefs, photographers, and tutors. You’ll need to present pay stubs going back a year or two to demonstrate this seasonal pattern of overtime work.

To calculate lost wages for overtime, simply multiply the number of overtime hours you missed by your ordinary hourly overtime wage. By Texas law, the overtime pay multiplier must be at least 1.5 times your normal hourly rate of pay.

Commissions

Some jobs primarily pay on a commission basis, such as salespeople, stock brokers, travel agents, insurance agents, financial advisers, and real estate agents. If you’ve missed out on any commission income, you can also include this in your damages.

Bonuses

At many jobs, there are various kinds of discretionary and non-discretionary bonuses paid, including end-of-year bonuses, milestone bonuses, profit-sharing bonuses, spot bonuses, retention bonuses, and holiday bonuses. Any bonuses you’ve missed because of your injuries can be counted as lost wages.

Tips

Tips from customers can contribute a significant amount to the total income of many professions, such as waiters, doormen, taxi drivers, delivery drivers, and bartenders. As such, lost tips should also be included in your damages, provided that you can prove the tips you ordinarily receive when you don’t miss work. This can sometimes be tricky if a worker isn’t in the habit of reporting their tips.

Paid Time Off

Many employment contracts allow a given number of paid days off, such as sick and vacation days, or personal time for doctor’s visits and family emergencies. After your auto accident and injury, you may have used some of your paid days off while you missed work.

But paid time off should be saved for voluntary use at your own discretion. In this case, you were forced to use these paid days off by the at-fault driver and so you have a right to recover monetary compensation for them in your personal injury claim.

The damages for lost paid time off are usually calculated in the same way as a lost hourly wage or salary. Assuming an ordinary workday is eight hours, you’d work out your hourly income and multiply it by eight for each sick, vacation, or personal day you used.

Promotions

You may have missed out on a promotion because of your car accident injury. If your employer can confirm this or your attorney can find proof of this, you may include it as a loss in your auto accident insurance claim.

Financial Benefits

There are various financial benefits you might have missed out on due to your injuries. Any car insurance claim filed with the other driver’s insurance company should include missed financial benefits in the damages. These benefits may include payments toward insurance plans for medical, life, dental, disability, and mental health. They may also include retirement contributions, stock options, and profit-growing opportunities you’ve lost.

Student Loan Repayment

Some employers attract recent graduates with offers to cover or reimburse their university tuition fees. If you’ve missed out on any student loan repayments, this is a clear monetary loss to be included in your lost wages.

Child Care Assistance

Employed parents often take advantage of on-site childcare facilities offered by their workplace or financial assistance provided for off-site childcare. If you’ve had your work-related childcare assistance disrupted in any way because of your physical injury, or you’ve had to use more of your employer’s childcare assistance than you otherwise would have, you may include it in your damages.

Development and Training Programs

Career development and training programs are often provided to employees by employers at no cost. If your injury has forced you to miss out on any such training, you may include it in your damages.

This would include any missed education allowance you usually receive. Even missed team-building activities can be considered a loss you’ve suffered and may seek reimbursement for.

Car and Transport Allowance

Over 35% of employers provide a public transport allowance to their employees. A flat monthly car allowance is also very common. Any missed contributions toward your car or transportation costs may be included in your damages.

Other Work-Related Perks

Recovering lost wages includes any kind of benefit or perk you missed out on because of your injuries. In your personal injury claim, you may pursue compensation for missed perks such as gym memberships, wellness programs, and free meals.

After a motor vehicle accident, when first considering how to collect lost wages as a result of missing work, many employees are unsure what they can and cannot include in their damages. A car accident lawyer can help you work out the full extent of your lost wages, ensuring you don’t leave money on the table when you file your claim.

Lost Wages for Self-Employed Individuals

Over 10% of the workforce in the US is self-employed. If you work for yourself and you’re missing work because of car accident injuries, you have a right to compensation for any income you’ve lost.

You can pursue damages for existing contracts that have been lost or diminished in value by your inability to work. You may also seek compensation for lost business opportunities; you may need to constantly network and market your services to draw in new clients. If your car accident injuries have kept you from these activities, you have a right to seek compensation.

You might also have lost goodwill with your existing clients or had your professional reputation harmed by your inability to work. This is another loss you’ve suffered because of the at-fault party’s actions, and so you have a right to seek reimbursement for it.

Lost Wages for Business Owners

If you’re a business owner, you may also have a right to be reimbursed for lost wages after a car accident. But claiming lost wages as a business owner is often far more complex as there isn’t always a clear and direct correlation between the profits of a business and the manpower of the business owner, as there is with an employee receiving an hourly wage.

How Have Your Car Accident Injuries Affected Your Business?

For business owners, any lost income damages sought would depend on various factors, such as the business type and how much the owner contributes to the day-to-day running of the business. Another important factor is how easy it would be to hire a manager to maintain the business while the owner is recovering from their injuries. A jury might decide that suitable lost income damages are the cost of hiring and training a replacement manager.

It’s also important to consider who the plaintiff should be: the business owner or the business itself. Figuring out these various factors will usually require an experienced personal injury lawyer.

Despite their relative complexity, car accident cases involving injured business owners can successfully recover lost income damages. As with all damages in personal injury claims, the key to winning fair compensation from insurance companies lies in providing adequate proof.

How To Prove Your Lost Income Damages

Insurance companies tend to dispute damages of a lost income claim if their insurance adjusters find any reason to do so. It’s therefore necessary to prove lost wages with a good deal of evidence.

Unless you’ve suffered a particularly serious injury, you’re unlikely to be missing work in the long term. If you’ll soon be able to return to work as usual, or you’ve already returned to work as usual, proving your lost wages is usually quite straightforward.

You can usually prove lost wages by presenting prior pay stubs, and also a letter from your doctor and your employer. In their letter, your doctor can explain how your injuries have prevented you from working and also include your medical records, plus their original disability slip.

Your employer can verify the number of work hours you missed, all perks and benefits you’ve lost, and your ordinary hourly wage or salary. It’s generally easier to prove lost wages with a lower-paying job or simpler payment structure.

With higher-paying jobs and more complex payment structures involving various commissions and bonuses, you may need to take more care in preparing your evidence. However complex, a personal injury lawyer can help you prepare the evidence required.

The Value of Expert Witness Testimony

Proving lost wages in more complex car accident cases may require a forensic accountant expert witness to clarify the numbers for a jury. A vocational rehabilitation expert may also be retained to support the doctor’s statement.

An experienced attorney will have access to many local expert witnesses to help in this matter. Expert witnesses are frequently a very useful tool in a personal injury lawyer’s toolkit.

Proving Lost Income If You’re Self Employed

When you miss work as a self-employed individual, you’ll need more documentation to prove your lost wages. In addition to medical records and a letter from your doctor regarding your car accident injuries, you’ll usually need to present tax returns, contracts, invoices, evidence of lost contracts, and well-supported estimations of lost business opportunities and damaged client relationships.

Proving Lost Income as a Business Owner

As a business owner who’s sustained injuries in a car accident, proving lost profits and harm to your business will require presenting financial statements, tax returns, business contracts, and other documentation. This will usually take a car accident attorney with experience recovering compensation for business owners, and possibly expert witnesses with an in-depth understanding of your business and industry.

Claiming Damages for Lost Earning Capacity

Sometimes car accidents can result in serious injuries that temporarily or permanently prevent the injured victim from performing any of their previous job duties. If you’ve suffered reduced or lost earning capacity in this way, you may seek future lost income damages from the other driver’s insurance company or in a personal injury lawsuit.

Calculating lost earning capacity requires figuring out how much you might have earned over the course of your entire life had you not been in a car accident. For this, your age and life expectancy will be taken into account. Your industry, profession, skills, qualifications, and career prospects will also need to be considered.

Your employer will need to provide a detailed statement supporting all of these details. Your attorney may also hire expert witnesses with detailed professional knowledge of your profession.

If your injury is less severe than a permanent disability, various medical professionals may be consulted to calculate the chances of your condition improving, or worsening, over the years. Any final estimated figure will also need to be adjusted for predicted inflation.

The challenge of valuing lost earning capacity is best left to a very experienced car accident attorney. With training, experience with prior cases, and access to suitable expert witnesses, car accident lawyers can properly calculate and prove your lost earning capacity damages.

How a Car Accident Lawyer Can Help

Without an attorney by their side, car accident victims often find it difficult to recover full lost wages after a car accident. If you’ve missed work or suffered lost earning capacity, it’s crucial that you recover a full and fair legal settlement from the at-fault driver’s insurance provider.

Without the guidance of an attorney, it’s quite possible to make mistakes either in calculating or proving our lost wages. Many car accident victims have lost compensation because of errors made at an early stage of their car accident claims.

When you retain a car accident attorney, they investigate your accident and your lost wages thoroughly. They use their expertise, legal know-how, and experience with other car accidents to calculate your damages.

Your car accident lawyer can then handle the entire car accident claim for you. This includes filing the claim, gathering evidence to prove the value of your damages, negotiating with the insurance company, and fighting hard to recover full compensation for your lost wages, medical bills, and other losses.

If you hire an experienced trial lawyer, they can also handle a lawsuit and court case for you, should you need to take your car accident claim to court. With the entire claims process taken out of your hands, you can then put all of your energy into recovering from your car accident injuries and returning to work as soon as possible.

There’s no reason to suffer through the aftermath of a car crash alone. It’s usually far less stressful with an experienced lawyer in your corner. It’s also easier to be fully reimbursed for lost wages after a car accident in Texas or anywhere else.

If you’d like an experienced trial attorney to help you recover lost wages in your car accident claim, contact Brian C. Gutierrez at 979-271-5338 for a free consultation. With over 15 years of experience successfully recovering lost wages in Texas car accident cases, our lawyers will fight relentlessly to recover the full damages you deserve.