Recovering Car Accident Damages for Lost Wages & Diminished Earning Capacity
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Mary Martin
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Mary Martin has been a legal writer and editor for over 20 years, responsible for ensuring that content is straightforward, correct, and helpful for the consumer. In addition, she worked on writing monthly newsletter columns for media, lawyers, and consumers. Ms. Martin also has experience with internal staff and HR operations. Mary was employed for almost 30 years by the nationwide legal publi...
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UPDATED: Jul 17, 2023
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UPDATED: Jul 17, 2023
It’s all about you. We want to help you make the right legal decisions.
We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.
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The damages recovered in a car accident lawsuit often include compensation for lost wages for a job you already have. But if a claim for loss of earning capacity is based on anticipated future losses, it is difficult to determine proper damages. Consult an experienced accident attorney for specific questions about including loss of earning capacity in your car accident damages claim.
For an overview of determining damages see What Is Your Car Accident Claim Worth?
How to Show Damages for Loss of Earnings Capacity
Any party seeking damages must prove there is a reason for the award, and demonstrate a way to calculate it. The uncertain nature of anticipated earnings capacity can make this confusing. While one side may argue that the loss of earnings should cover the difference between what the party made before the car accident and is currently making, the other side may argue that the party should be retrained in another area of his or her job, or even in a completely different field. Whether or not an injured party can claim loss of future earnings depends on the facts of each case, and can be difficult to predict.
If the injured party was up for a promotion, and the promotion was lost because of the car accident, this can be a factor in favor of recovering loss of earnings capacity damages. A party’s age at the time of the car accident is also taken into consideration. For example, if the person injured is twenty years old, the court will take the average number of working years left in his or her life to determine the damages for loss of earning capacity, which would be much higher than for someone who is closer to retirement age.
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How to File a Claim for Loss of Earnings Capacity
Filing a car accident lawsuit for loss of earning capacity can be complicated, because it rests on so many variables. The best thing to do if you believe that you have a claim for loss of earning capacity is to contact an experienced personal injury or auto accident attorney. After reviewing your case, an attorney will be able to weigh all the relevant factors in your claim, and come up with fair assessment of car accident damages to negotiate with the insurance company, or present to the jury if the car accident lawsuit goes to trial.
Case Studies: Strategies for Successfully Recovering Car Accident Damages for Lost Wages & Diminished Earning Capacity
Case Study 1: John’s Lost Wages due to Car Accident
John is a 35-year-old software engineer who was involved in a severe car accident caused by a negligent driver. As a result of the accident, John suffered multiple injuries, including a fractured leg and a concussion. He had to undergo several surgeries and was unable to work for six months.
The attorney negotiated with the insurance company on John’s behalf and presented the evidence of his lost wages and diminished earning capacity. Eventually, they reached a settlement agreement that included compensation for John’s medical expenses, pain and suffering, and the wages he lost during his recovery. The settlement amount allowed John to cover his expenses and provided financial stability during his healing process.
Case Study 2: Sarah’s Diminished Earning Capacity following a Car Accident
Sarah, a 28-year-old marketing executive, was involved in a car accident caused by a distracted driver. She sustained severe injuries to her back and neck, resulting in chronic pain and limited mobility. These injuries made it challenging for Sarah to perform her job duties effectively, limiting her future earning potential.
The attorney filed a personal injury lawsuit against the at-fault driver and their insurance company, seeking compensation for Sarah’s diminished earning capacity. Through a combination of negotiation and legal proceedings, they successfully reached a settlement that accounted for Sarah’s reduced earning potential and future loss of income.
Case Study 3: Mark’s Lost Wages as a Self-Employed Contractor
Mark, a 40-year-old self-employed contractor, was involved in a car accident caused by a drunk driver. He suffered multiple injuries, including a broken arm and a severe concussion. As a self-employed individual, Mark relied heavily on his ability to work on construction sites and manage his projects to earn an income.
Negotiations with the insurance company proved challenging due to the nature of Mark’s self-employment. However, the attorney skillfully argued the potential income loss and presented the evidence gathered. Eventually, they reached a settlement agreement that included compensation for Mark’s lost wages and potential income loss, providing him financial relief during his recovery and compensation for his diminished earning capacity.
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Mary Martin
Published Legal Expert
Mary Martin has been a legal writer and editor for over 20 years, responsible for ensuring that content is straightforward, correct, and helpful for the consumer. In addition, she worked on writing monthly newsletter columns for media, lawyers, and consumers. Ms. Martin also has experience with internal staff and HR operations. Mary was employed for almost 30 years by the nationwide legal publi...
Published Legal Expert
Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.