When one party needs to secure compensation from another, there are often several different options available. Sometimes, the best solution involves making use of insurance. Businesses and individuals carry insurance to protect against liability if a product fails or someone causes a car crash. Additionally, state law permits those harmed by the incompetence, misconduct or contractual non-performance of others to take legal action in certain scenarios. A personal injury lawsuit could result in compensation for economic losses caused by a car crash or similar incident.
People often request compensation for both fixed financial losses, like medical bills, as well as harder-to-predict future losses. Lost wages are often one of the largest elements that contribute to the total value of a personal injury lawsuit or insurance claim. Yet, all too often, people make mistakes and end up underestimating the income they might lose because of a serious injury.
Base wages aren’t the only consideration
Frequently, people employ a very basic approach to calculating lost wages. They multiply someone’s salary by the number of years they may have worked if they can no longer do so. They might also compare their previous wages with minimum wage, which might be all that they can earn because of their current medical limitations.
Such calculations do not paint an accurate picture of the financial impact an injury may have on an individual and their family members. Base pay does not include key benefits, like health insurance and paid leave. Someone’s employee benefits can substantially increase the total value of an employment arrangement. They might use certain benefits not only for themselves but also for their closest family members, including their spouse and children. Those benefits can drastically increase the lost income they experience every year they are unable to work in their chosen profession.
Additionally, those calculating lost wages have to think about future career development. Frequently, workers receive raises and promotions that increase their base pay and expand their benefits packages. The process of calculating lost wages may have to factor in any advancement opportunities and pay increases that a worker may have received if they could devote their full effort to their career.
Particularly when preparing for a lawsuit that is not subject to restrictive policy limits, those calculating lost wages may need to err on the side of caution by assuming greater productivity and higher earning potential later in their careers.
Individuals struggling with major injuries after a car crash or similar incident may have a difficult time handling complex financial and legal matters on their own. Seeking legal guidance can make a big difference for those in need of compensation after they get hurt as a result of the actions or negligence of another party.
