Do Insurance Companies Pay For Lost Wages?

Generally speaking, yes – auto insurers should pay for lost wages in New York State as part of their expansive “no-fault” benefits. There are exceptions to every rule and certain exclusions. Sometimes you have trouble extracting maximum compensation from an auto insurance company for no reason other than their desire to protect their bottom-line profits and pay you as little as possible for your claim. In these cases, a car accident attorney in New York can be especially beneficial in acting as your advocate.

Personal injury Protection (PIP) can help you afford time off work after an accident.

Mandatory New York Personal Injury Protection (PIP) will provide up to $50,000 in compensation toward medical bills and loss of income following a car accident. Covered expenses include medical services from your doctor, dental restoration, hospital expenses, surgeries, psychiatric treatment, diagnostic imaging, ambulatory services, medication, and physical therapy.

If you are unable to work due to the severity of your injuries, you may receive money to cover your “lost wages,” including your hourly or salaried base pay, overtime, sick pay, vacation days, bonus days, commissions, perks, pay raises, and retirement fund contributions. In New York, you can receive up to $2,000 per month or 80% of your monthly earnings, whichever is lower.

These payments may continue for up to three years or up to the policy limit, whichever occurs first. New York PIP also offers $25 per day toward laundry, meal service, cleaning service, or other home maintenance tasks you can no longer do on your own. For minor car accident injuries, this will be enough, but moderate to severe accidents may go well above and beyond policy limits.     

There are other ways to seek lost wage compensation besides going through insurance.

When you have exhausted the amount of wage loss benefits included in your PIP policy, you may be able to continue receiving benefits through employer-paid disability insurance or through the individual disability insurance premiums you’ve paid into yourself (typically set up through a paycheck deduction at work). When your disability is expected to last longer than 12 months, social security disability benefits may apply. These benefits will not likely reimburse you fully, but rather, at a percentage of your usual income – typically 50 to 70 percent.

If the negligence of another driver caused your injuries, then you may be able to step outside the no-fault system to submit a larger claim for exorbitant medical bills and lost wages owed by the other driver’s bodily injury liability coverage. There is no limit to what you may recover, though it is easier to receive full compensation value if you are suing a third party (like a driver’s employer or the government in charge of maintaining the roads) rather than an individual. In addition to receiving compensation for medical expenses and lost wages, you can also recover damages related to pain and suffering, as well as emotional injuries that were directly related to the crash.

Some people are NOT eligible to receive full no-fault benefits, including lost wages.

Even though you are no less injured than another accident victim, you waive your right to no-fault benefits if:

  • You were operating a motor vehicle under the influence of drugs or alcohol.
  • You committed a felony offense or were fleeing a law enforcement officer at the time of the crash.
  • You were engaged in reckless street racing at unsafe speeds before the collision.
  • You were driving a stolen vehicle or in the act of committing a crime at the time of injury.
  • You failed to abide by the 30-day deadline to notify your insurance carrier of the accident in writing.

Take several important steps to ensure the insurance company covers your claim for lost wages.

Getting a police report at the time of the accident is a wise move that can also satisfy your insurance company’s request for notification within 30 days. The no-fault insurer will send you an application to apply for no-fault benefits, which must be filled out completely, signed, and returned (ideally by certified mail). This basic application will require information such as your name, address, date of birth, social security number, date of the accident, and a description of your injuries.

  • You may be required to send in supplemental documentation, such as a letter from the doctor describing your injuries and the amount of time you’re expected out of work, a letter from your employer verifying your wage and amount of missed work, and tax information (if you’re self-employed or an independent contractor).
  • Once your application is received and approved, the carrier will assign a claim number, which you will share with your health care providers, along with the date of the accident and your date of birth. Your providers will sign an assignment of benefits form, which allows them to bill the no-fault carrier directly.
  • Sometimes the whole process goes smoothly, and you receive enough benefits to keep your household afloat while you recover. Other times, you may need legal guidance to see you through these turbulent times.

Most car accident attorneys offer free consultations and contingency-based advocacy, so you have nothing to worry about.