If an accident caused you to lose your income and financial opportunities, then you are entitled to compensation. Unfortunately, in any personal injury claim, one of the most overlooked damage is lost income and reimbursement for missed work opportunities.
What Can You Recover?
You can be reimbursed by the person at fault or their insurer for time you missed at work and any income you didn’t receive while you recovered from your injuries. Compensation will depend on if you:
- Had a full time or part time job
- Were salaried
- Were self-employed
- Earned a weekly or hourly wage
- Were in occasional or irregular employment.
Insurers do not include lost income as part of the personal injury settlement formula. This means that it will be added after a multiplier has been determined.
Let’s say for instance you were involved in a slip and fall accident and your medical bill was $1, 000 and your lost wages was $1000. If your injuries were soft tissue only, your medical expenses would be multiplied by two based on a formula of two times special. Your $1, 000 would then be added to the multiplied amount. The formula would therefore be 2 x $1000= $2, 000 plus $1, 000 lost income so your total would be $3000. This amount can either go up or down during settlement negotiations depending on the factors affecting your case.
Does Vacation Pay or Sick Leave Affect Your Case?
Some employers and insurers might argue that you were able to take vacation days or sick leave days during the time you were recovering from your injuries so technically, you didn’t lose any income. However, you are entitled to use your sick leave days or vacation days whenever you want or need to so being forced to use them up is considered the same as losing income.
How to Document Lost Income
You must be able to show:
- How much money you would have made hadn’t you missed work
- The time you missed from work due to your injuries
Collecting this information if you were employed is very easy and you can ask your employer can print out a letter for you. The letter should clearly show your full name, your pay rate, your position at the company, how many days a week you work and how many days you missed due to your injuries.
Proving lost income becomes complicated if you are self-employed or you don’t have a regular job. Not only do you have to show how much time you missed from work but you also have to show how much money you lost. Evidence such as cancelled appointments or a drop in invoices will go a long way in helping your case.
The next step is to show how much you would have earned had it not been for the accident. If you had been working steadily before the accident, you can put together evidence of the money you received by presenting copies of payments received, invoices and billing. Then depending on how much you were earning and how much you were working, you can calculate how much income you would have lost due to the nature of your injuries.
If you were in occasional employment, you can calculate lost income by showing how much you work and earn in a year and then dividing that into a monthly or weekly average.
The best way to prove how much you earn is to show your income tax return for the previous year. Your insurer does not need to see your tax exemptions, deductions and other information; they only need to see your gross income for the year. If your earnings for the previous year were at a first time low then you can show earnings for the previous two to three years. The idea here is to show a pattern of how much you typically earn every year.
Lost Opportunities
It’s harder to prove that you lost income because of a missed work opportunity than it is to prove you lost income by missing actual work. Insurance adjusters, however, know that lost opportunities are a valid part of your claim. Lost opportunities will increase your final compensation but by how much will depend on if you can show much you would have earned from that opportunity.
