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This content is for informational purposes only and is not intended to provide legal advice.
Compensation for lost income in personal injury cases has gained a lot of attention in past years. Beyond the physical injuries associated with an accident, lost income and loss of income potential due to injury constitute a considerable blow to the financial stability of a household.
In addition to pain and suffering, courts often award damages that cover lost income. When strategizing about how to calculate your lost income, your attorney will consider the following:
- The kinds of income that you can recover
- Ways to prove your current, past, and future income
- How to recover lost income opportunities
Lost Income: What Can You Recover in a Personal Injury Case?
In most cases, you are eligible for reimbursement from the defendant or their insurance company if their actions caused you the incapacitating injury. If you are no longer able to work due to health reasons, or if you have lost potential income as a result of the accident, you may be entitled to damages.
It is important to note that lost income is typically not included in the calculation for personal injury damages. Instead, it is usually calculated on top of other special damages in the case. Furthermore, you are entitled to income loss pay, even if you took sick or vacation days following your accident.
Documenting Your Lost Income
To recover lost income, you must be able to show:
- How much time you were out of work as a result of the accident.
- The amount of money you would have earned had you been able to work.
- Your standard earnings.
- A letter from your employer that outlines your role at work.
The letter from your employer can touch on the following aspects: the days you work, your pay rate, how long you have been on your job, and whether you are paid weekly, bi-weekly or monthly.
If you are self-employed, proving lost income can be a little more of a challenge. Because you do not have predictable pay stubs, you will have to rely on other resources to make your point. Paint a clear picture of how your business operates and how the accident affected your profit.
For some self-employed experts, this means showing that they can no longer travel to meet clients, attend trade shows, or get certifications. Some self-employed specialists can also showcase a drop in billing after the accident.
Proving Your Lost Potential Income
You can also receive compensation for the income you would have earned had you not been injured. Start by showing how much you have earned in the previous year. Use this to as a baseline for your estimate. For proof, collect the following documents:
- Client invoices
- Receipts
- Billing statements
For people working for an employer, calculating the value of lost earnings is somewhat easier. You can show proof of your regular earnings, estimate how long you will be without work, and calculate the amount of money you will lose from your injuries.
When you have been hurt in an accident, the costs of your medical treatment, lost wages, and lost potential income can be high. The good news is that you may be entitled to damages for your injuries and lost income.
Insurance adjusters know that you will likely receive court compensation for potential lost income, so they often raise the amount of their settlement offers to reflect this possibility.
Consult an Attorney
It is essential to consult your attorney before accepting a settlement offer from the insurance company or the defendant. In many cases, the insurance company will offer less than you may be able to recover at trial, capitalizing on your desire to move on quickly with your life.
If you have been hurt in an accident, there is a lot you need to know about calculating damages. The process can be a bit challenging to navigate, so it pays to have a skilled personal injury team on your side to fight your case. Don’t struggle alone through the aftermath of your accident.
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