How to Document Lost Wages Related to a Personal Injury Claim

Whether you are working directly with an insurance company to settle your personal injury claim against their negligent driver, or using the services of an attorney, the documentation requirements for a lost wage claim are the same. You will need to prove what you have lost if you expect to be compensated for it. Both the insurance company and the attorney should help you along, but it can be very frustrating to believe that you have submitted everything you need to but find out that the insurance company needs more. Here are some pointers to help save you time.

Doctor’s note: It is reasonable to miss a couple of days from work, especially if the accident happened on a weekday. However, you will need a note from a doctor if substantial amount of time is missed. If you were seen at an emergency room, the ER notes will usually have a notation regarding “rest”, which would indicate an excuse from work.

Employer’s note or a pay stub: Either one of these must show your wages or salary so that the insurance adjuster can figure out what your missed time is worth. It is not necessary that you show that your pay decreased because of the accident and injury. Lost wages can take the form of lost vacation time, sick time or other personal paid time off: taking that time off due to an injury means that you cannot use it later for vacation, illness or anything else.

Lost wages do not have to be actually incurred before you are ready to discuss settlement. For example, in an extreme case where an injury causes the victim to be unable to return to work or unable to return to the same type of work, future lost earnings may be estimated and included in the evaluation of the case.

Lost wages can be taxable. This is the reason why the lost wage portion of a personal injury claim is based on gross pay (before income taxes are deducted) and not on net pay (after taxes). If your case settles, ask for a letter from the insurance company explaining the settlement: outline what portion of the money is for lost wages and what is for medical expenses and the rest. There is no reason for this request to be denied; insist if you have to. You may need this information in writing when you file your income tax forms the following year.

Lost wage documentation for the self-employed can be more difficult. You will still have the same doctor’s note requirement, but there will be no letter or pay stub from an employer. You may need to submit copies of your income tax forms, or copies of work contracts, even letters from regular customers; anything you need to show the income that you lost. Prepare for more resistance from the insurance company when pursuing a non-traditional lost wage claim, but do not give up.

This article is written for informational purposes and is not intended to take the place of competent local legal counsel.

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