The new maximum work loss rate an auto accident victim can recover is $5,392 per month
No Fault work loss (also called wage loss or lost wages) is an important Michigan No Fault PIP benefit that compensates you for your wages that are lost when you’re injured in a motor vehicle accident and unable to return to work. Work loss is paid by your own No-Fault insurance company. A person can recover work loss/wage loss for up to the three years after the date of a car accident.
It also does not matter if you caused the motor vehicle accident or if you were injured by another. Either party can recover work loss (which is why the law is called “No Fault”). Regardless of fault, these insurance benefits are available if you’re injured in a car accident in Michigan and are covered by No Fault auto insurance.
If you’re injured in an automobile accident between October 1, 2014 and September 30, 2015, your maximum wage loss benefits are now $5,392 per month under No Fault policies.
That means you’re now entitled by law to a maximum amount $5,392 each month from your own No-Fault auto insurance company for up to three years following the date of your accident.
The new maximum also applies to survivor’s loss benefits, when someone is killed in a motor vehicle accident.
The previous maximum for lost wages a person could collect was $5,282 per month.
Do I need to hire a lawyer to collect No Fault work loss?
You do not need to hire a lawyer. You will need to contact your own auto insurance company, or the auto insurance company that that has the highest priority to pay No Fault insurance benefits for your motor vehicle accident.
The claims adjuster should send you an application for benefits, which you should fill out and send back. Submit a wage and salary verification form from your employer, provide a paycheck stub or other proof of how much you make, and you should start receiving work loss from your insurance company shortly thereafter.
How is work loss in Michigan calculated?
The maximum amount for work loss equates to an estimated annual income of $70,000. This is based on the Michigan No Fault work loss formula, which is 85 percent of one’s gross income tax-free.
So if you earn $70,000 per year, your income should be fully covered by No-Fault insurance wage loss benefits if you’re seriously hurt in a car or truck accident.
Keep in mind, lost wages are restricted only to taxable income. They do not include health insurance, pension and other contributions.
But what about work loss if I make more than $70,000 a year?
No Fault work loss is capped. If you make 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 driver who caused the crash.
You would therefore receive the excess work loss from the auto insurance policy of the driver who caused the crash. Your excess work loss would become part of any lawsuit filed by your attorney for pain and suffering and excess economic damages against the at-fault driver.
The next question that usually follows is, “What if I was partly at fault for the accident?”
Well, in Michigan, you can recover your excess work loss depending on the percentage of fault between the parties for the motor vehicle accident. In the vast majority of car wrecks I see as an attorney, one person is usually 100% at fault. But in crashes where both parties share some fault, here’s an example of how you would calculate your “excess wage loss”:
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 still have questions, you’re welcome to call one of our attorneys for free No Fault insurance advice. We would be happy to answer your questions about your work loss or any other Michigan No Fault benefit at no charge.