What You Should Know About Car Accidents and Lost Wages

What you should know about car accidents and lost wages is that not every insurance policy will cover your lost wages in the event you are seriously injured in an accident and are unable to work. Look at your policy closely to see if medical payments and lost wages are covered, and learn more about finding the appropriate coverage for car accidents and lost wages below.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Nov 15, 2020

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Many people are not aware of it, but if you are injured in an auto accident and unable to work, you may be entitled to payments during your recovery from the insurance company of the person who was at fault in the accident.

Some types of car insurance, such as No-fault insurance, include medical payments automatically, but not all policies have it. Here’s what you need to know about car accidents, lost wages, and how to protect yourself from potential financial hardships.

When it comes to car accidents and lost wages, your first obligation is to yourself. Since you cannot depend on the other driver having sufficient insurance to pay for the money you lose while recovering from injuries, add personal injury protection to your own policy. Along with the uninsured motorist coverage that is required in many states, PIP coverage will make sure that your injuries are cared for and that you do not suffer from a loss of the wages you would otherwise have been able to earn. If it turns out that the at-fault driver had sufficient insurance, yours will not be used, but it is a financially good investment to plan on the worst case scenario, for the sake of yourself and your family.

If you are the one who was at fault in the accident, the bodily injury portion of your policy may include medical payments, another term used for reimbursing someone for lost wages and other costs. If your policy does include medical payments by default, ask your insurance company about adding it. You could pay for this coverage for years and not use it, but a single claim for bodily injuries and lost wages will entail more costs than all of your years of paying premiums for medical payment insurance coverage.

Remember, the minimum coverage required by each state is just that: the minimum amount considered to be effective. In an accident where multiple cars are involved or serious injuries, minimum insurance coverage would be quickly exhausted and you would be faced with mounting out of pocket expenses. To protect yourself from that, make sure that your policy is prepared for the worst, not the best, and it still might be a smart decision to back up your car insurance with an umbrella liability policy to make sure that everything is taken care of.

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