There are two ways to make a claim for lost wages after a car accident in Pennsylvania. First, a claim for PIP (personal injury protection) benefits may be made under the injured individual’s own auto insurance policy, so long as “income loss benefits” was purchased.
The most important thing to know about first party benefits is that they are available regardless of fault. An individual who is injured in a car accident that is their own fault can still make a claim for any PIP benefits. For example, a Philadelphia resident falls asleep at the wheel, veers off the road and strikes a tree. She sustains some serious injuries. A a result of the injuries, she is unable to work for nearly 2 months. If her car insurance policy includes income loss benefits, she can make a claim for the 2 months of lost wages, even though the accident was her fault. However, her claim would be subject to the coverage limits and other exclusions, which are discussed in detail below.
The second way to make a claim for lost wages usually requires a court case. If the car accident was the fault of another driver or party, lost wages may be recovered by filing an auto accident lawsuit.
The Basics of PIP Coverage
PIP benefits are also known as first party benefits and include a variety of benefits under Pennsylvania auto insurance law. Only one of them, $5,000 in medical benefits, is mandatory. However, the $5,000 minimum (per accident) limit does not apply to recreational vehicles that are not intended for highway use or motorcycles. Usually, if you’re injured while operating a recreational vehicle like an off-road bike or a motorcycle, your health insurance is the sole source of medical benefits.
The rest of the first party benefits are optional. They include the following:
- extraordinary medical benefits (up to $1,100,000),
- income loss benefits (see below),
- accidental death benefits (up to $25,000), and
- funeral benefits ($2,500).
Income Loss Benefits – Can You Receive Compensation for Wage Loss After an Auto Accident?
Income loss benefits are set out by the Pennsylvania Motor Vehicle Financial Responsibility Law. Auto insurance companies must offer income loss benefits when a PA resident obtains auto insurance in this state. These benefits are subject to the following limitations:
- a 5 day waiting period,
- a minimum of at least $2,500 per month to a maximum benefit of at least $50,000,
- 80% of the gross income.
In a typical auto insurance policy, the income loss benefit amount will be capped at $1,000 per month, up to a total of $5,000. Under PA’s auto insurance law, an insurance company must at least offer up to $2,500 per month with a max of $50,000. Some Pennsylvania residents can purchase higher limits, although these types of policies are rare for average household auto insurance policies.
When it comes time to make a lost wage claim, the law places a cap of 80% of gross income. Here’s how this works. An individual injured in an auto accident in Philadelphia misses several weeks from work. Their gross weekly wage is $1,000, or $4,000 per month. With a typical policy containing $1,000/$5,000 income loss benefits, the max benefit would be $1,000 per month, no more than $5,000 total (or 5 months of benefits). If a higher coverage policy was purchased, the max monthly benefit would be 80% of $4,000, or $3,200, and no more than $50,000 total (about 15 months of benefits).
Under Pennsylvania law, a claim can even be made for income loss benefits where an individual is self-employed or has to hire special help to enable the individual to work. For example, an individual who is self-employed as a graphic designer, cannot see clearly due to an eye injury in an auto accident. The individual may be able to make an income loss benefit claim for the cost of hiring a temporary employee who will perform the graphic design work until the eye is healed.
Income loss benefits are not available in cases of death, except that benefits are available for wages lost for any period of time between the accident and the date of death. For example, an individual who is catastrophically injured in a car accident is unable to return to work at all and unfortunately dies 3 months later due to a complication. Here, there is a valid wage loss claim for the 3 month period to the date of death, subject to the 5 day waiting period and the coverage limits.
For more info, please visit our Pennsylvania & New Jersey Auto Injury Law Library.
Pennsylvania Auto Accident Lawyers
Laffey, Bucci & Kent is a Philadelphia based law firm with offices throughout the Northeast. Our attorneys handle car, truck and pedestrian accidents. For more information about your legal rights to receive compensation for lost wages after a car accident, please contact our law firm. (866) 641-0806
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