How much do auto accident victims recover under No Fault for wage loss as of Oct. 1, 2012?
If you’ve been injured in an auto accident in Michigan, the biggest fear that people like you have is wondering how you will be able to support yourself if you can’t return to work right away. But, if you are covered by Michigan No-Fault insurance, you’re entitled to an important No-Fault insurance benefit called wage loss.
With this benefit, your auto insurance company reimburses you for wages lost due to your personal injuries.
Here are the new wage loss rates:
As of October 1, 2012, the new statutory maximum for Michigan wage loss is $5,189 per month. In other words, if you are out of work due to personal injury from an auto accident, you’re entitled to up to $5,189 each month.
The new maximum rate also applies to survivor’s loss benefits. Survivor’s loss is different from wage loss. Survivor’s loss is a No-Fault benefit paid when a spouse or parent is killed in a motor vehicle accident, and then his or her survivors are entitled to these No-Fault benefits.
The previous maximum for lost wages was $5,104 per month.
Based on Michigan’s 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 if you earn less than $70,000 per year, your income should be fully recovered by No-Fault wage loss benefits in the event of an auto accident.
Michigan wage loss benefits are restricted only to taxable income. Therefore, wage loss benefits do not include heath insurance, pension and other contributions.
If an auto accident victim in Michigan earns more than $70,000 a year
If you make more than $70,000 a year, anything you are owed over the statutory maximum is considered “excess wage loss.” You can recover excess wage loss from the auto insurance policy of the person who caused the crash.
Keep in mind that excess wage loss, which is an economic loss, is subject to something called “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 instance, if you were 75 percent at-fault for the crash and the other party was 25 percent at-fault, you could recover up to 25 percent of your excess wage loss from the at-fault driver’s auto insurance policy.
If both parties were 50 percent at-fault, you can recover up to 50 percent of your excess wage loss. Obviously, if you are 100 percent responsible for the crash, you could not recover the excess wage loss.
If you have been seriously injured in a car accident and are unable to work, call us at (800) 777-0028. We would also be happy to answer questions about your wage loss benefits at no cost or obligation.