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Michigan Car Accident Law – Wage Loss and Lost Income

A car accident can upend your life, both physically and financially. Not only do you have to suffer with the pain and discomfort, but the injuries can prevent you from working. This obviously causes immediate problems with paying bills, housing and basic necessities. But the Michigan car accident laws provides a quick way to get wage loss.

Can I Get Wage Loss after a Car Accident? 

Yes. An injured person is entitled to reimbursement for lost wages resulting from the motor vehicle accident. Under the Michigan no-fault law, an accident victim can receive 85% of their gross wages for up to three years beginning from the date of the accident.

The statute that provides lost wages after a car accident is MCL 500.3107, and is below:

  (1) Subject to the exceptions and limitations in this chapter, and subject to chapter 31A, personal protection insurance benefits are payable for the following:
  (b) Work loss consisting of loss of income from work an injured person would have performed during the first 3 years after the date of the accident if he or she had not been injured. Work loss does not include any loss after the date on which the injured person dies. Because the benefits received from personal protection insurance for loss of income are not taxable income, the benefits payable for the loss of income must be reduced 15% unless the claimant presents to the insurer in support of his or her claim reasonable proof of a lower value of the income tax advantage in his or her case, in which case the lower value must be applied.

Who Pays My Lost Wages after a Michigan Car Accident?

Because Michigan is a no-fault state, an injured person always starts with their own car insurance for lost wages. This is true even if the your car was not involved in the crash. If a person doesn’t have car insurance, then the car insurance of a resident relative must pay – such as a parent or sibling you live with. If there is no car insurance in the household, then the wage loss claim is made through the Michigan Assigned Claims Plan. This is an organization controlled by the insurance industry. After completing an application and providing other documentation, a car insurance company like Allstate or Nationwide will be assigned to pay wage loss. This called the order of priority.  

However, there is one major exception. If you are the owner of the car involved in the crash, and the car was uninsured, you can’t make a claim for wage loss benefits. Uninsured owners cannot make a claim for first-party benefits, including lost wages. 

What About Overtime and Fringe Benefits?

Wage loss can include base salaries, overtime and cost of living adjustments. However, fringe benefits like health insurance and pension benefits or other nontaxable income is not included. A doctor’s work loss slip or other proof of income is almost always required to receive the benefit. It is important to consult with a Michigan car accident lawyer who under wage loss to ensure you get everything you are entitled to. 

There is a statutory maximum you can receive in lost wages in one month.  This number is adjusted annually. If your earnings exceed the statutory maximum, you can receive reimbursement from the negligent driver’s insurance company through the pain and suffering case.

What Proof Do I Need To Show to Get Lost Wages? 

Car insurance companies will usually also require a wage, salary and benefits verification form to process the wage loss claim.  The wage verification form must be completed by the employer and include dates of employment, dates absent from work following the accident, the hourly wage or salary of the injured person and other wage information such as overtime hours and overtime pay.

However, if a wage verification form cannot be completed by your employer, then it is best to provide pay stubs for the three months leading up to the crash. This will give the adjuster handling the wage loss case an idea of how much you were earning around the time of the car accident. Form 1099s, tax returns, and other proof of income help as well.

It is also important to understand that you don’t have to file taxes to receive wage loss benefits. The statute does not require proof of taxes filed, only proof of lost income.  

What If I Wasn’t Working When the Car Accident Happened? 

A person who is not employed usually cannot get wage loss benefits. However, if you were looking for work or were temporarily unemployed at the time of the accident, you may be eligible to receive wage loss benefits under the Michigan no-fault law.

Please contact Michigan car accident lawyers at 1-800-LEE-FREE (1-800-533-3733) to learn more about wage loss benefits and the Michigan no-fault law.