The amount of wage loss an auto accident victim in Michigan can recover has recently been raised.
For those of you unfamiliar with No Fault wage loss, it is an important No Fault benefit that compensates you for your wages lost, when you’re unable to work due to injuries suffered from a car or truck accident. Wage loss is paid by your own No-Fault insurance company for up to the three years after an auto accident.
If you’re injured in an automobile accident between October 1, 2013 and September 30, 2014, your maximum wage loss benefits are now $5,282 per month.
In other words, if you’re unable to return to work, you’re entitled to a maximum amount $5,282 each month from your own No-Fault auto insurance company for up to three years following the date of your accident.
The previous maximum for lost wages a person could collect was $5,189 per month.
How Michigan wage loss is calculated
Based on the Michigan 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.
Another way of looking at lost wages 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.
Lost wages are restricted only to taxable income. Therefore, they don’t include health insurance, pension and other contributions.
But what about lost wages if I make more than $70,000 a year?
Keep in mind, wage loss as a no fault benefit is capped.
If you earn more than $70,000 a year, anything you’re owed over the statutory maximum is considered “excess wage loss” and is the responsibility of the at-fault driver. So you would receive the excess wage loss from the auto insurance policy of the driver who caused the crash.
And excess wage loss, which is considered an economic loss, is subject to “pure-comparative negligence.” This means in Michigan, you can recover your wage loss depending on the percentage of fault between the parties for the accident. In most accidents, one person is 100% at fault, so this is a non-issue. But in crashes where both parties share some fault, here’s an example of how you would calculate the “excess wage loss” you’re entitled:
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 you have questions about your lost wages, feel free to call one of our insurance attorneys for No Fault advice, free – at no charge. We understand navigating the No Fault insurance system after a car accident can be confusing, and we are happy to help explain what you are entitled to (without the need of having to hire a lawyer). Our number is (800) 777-0028.