No-Fault insurance attorney explains how much a car accident victim is entitled to in lost wages due to personal injuries
The amount of wage loss an accident victim can receive after a car accident or truck accident has recently changed.
What is wage loss?
For those unfamiliar with this important No-Fault insurance benefit, wage loss is exactly how it sounds – it compensates you for your wages lost, due to being unable to work because of personal injuries from a car accident. It is paid by your own No-Fault insurance company for the first three years after an auto vehicle accident.
Wage loss is capped, however, and any wage loss above the maximum amount becomes the responsibility of the wrongdoer driver who may have caused the motor vehicle accident.
So, if you are in a car accident between October 1, 2010 and September 30, 2011, your maximum wage loss benefits are $4,929 per month for the first three years.The previous maximum for lost wages a person could collect was $4,878 per month.
In other words, if you are out of work due to personal injury suffered from a car accident or truck accident in Michigan, you are entitled to a maximum amount $4,929 each month from your own No-Fault insurance company.
Based on the No-Fault wage loss formula, which is 85 percent of one’s gross income tax-free, the maximum amount for wage loss equates to an estimated annual income of $70,000. So another way of looking at wage loss is if you earn less than $70,000 per year, your income should be fully covered by No-Fault insurance wage loss benefits in the event of an auto accident.
If an auto accident victim earns more than $70,000 each year…
If you earn more than $70,000 per year, anything you are owed over the statutory maximum is considered “excess wage loss” and is recoverable from the auto insurance policy of the person who caused the car accident. This amount would become part of any lawsuit filed for pain and suffering damages and excess economic loss against the wrongdoer, and is normally paid by the auto insurance company that insures the wrongdoer.
Keep in mind that excess wage loss, which is an economic loss, is subject to pure-comparative negligence. This means you can recover your wage loss on a pro-rata basis, depending on the percentage of liability between the parties. For example, if you were 75 percent at-fault for the car accident and the other party was 25 percent at-fault, you could recover up to 25 percent of your excess wage loss from the wrongdoer’s insurance policy.
If both parties were 50 percent at-fault, you can recover up to 50 percent of your excess wage loss. If you are 100 percent responsible for the car or truck accident, there would be no recovery for excess wage loss.
As our No-Fault insurance attorneys have said, Michigan wage loss benefits are restricted only to taxable income. Therefore, wage loss benefits do not include health insurance, pension and other contributions.
If you have been seriously injured in a car accident and are unable to work, please call (800) 777-0028 to speak with a No-Fault attorney at no charge. We can tell you about your No-Fault rights and answer questions about your wage loss benefits.
– Steve Gursten is recognized as one of the nation’s top attorneys handling serious car and truck accident injury cases and auto insurance No-Fault litigation. Steve speaks and writes extensively on Michigan’s No-Fault laws.
Related information about the Michigan No-Fault law:
Michigan Auto Law is the leading largest law firm exclusively handling car accident, truck accident and motorcycle accident cases throughout the entire state for more than 50 years. We have offices in Farmington Hills, Detroit, Ann Arbor, Grand Rapids and Sterling Heights to better serve you.