If you are injured in a motor vehicle accident in Pennsylvania and incur lost wages as a result of your injuries, you have two separate sources from which to possibly recover your lost wages. The first source is referred to as first party benefits, and possibly allows you to recover your lost wages under an automobile insurance policy that you are insured under. This source is referred to as first party benefits, because it is based on a contract, not negligence. The Pennsylvania Motor Vehicle Financial Responsibility Law sets forth an order of priority specifying which automobile insurance policy you look to first for recovery of lost wages. See 75 Pa.C.S. § 1713(a). The priority order is as follows:
- If you are a "named insured" on an automobile insurance policy, then that policy of insurance may pay your lost wages, even if the insured vehicle on the policy was not involved in the accident. A "named insured" is usually the owner of the vehicle and his or her spouse.
- If you are not a "named insured" on any automobile insurance policy, but are an "insured" on an automobile insurance policy, then the policy that you are an "insured" may pay your lost wages. You are usually an "insured" on an automobile insurance policy issued to a relative that you live with, other than a spouse, such as your parent, sibling or child. As a resident relative of the policy holder, you are an insured on your relative's automobile insurance policy and this policy may pay your lost wages, even if your relative's insured vehicle was not involved in the accident.
- If you are not a "named insured" or an "insured" on any automobile insurance policy as discussed above, then the policy of automobile insurance applicable to the vehicle that you occupied at the time of the accident may pay your lost wages. Here the vehicle insured under the automobile insurance policy must be involved in the collision.
- If you are not a "named insured" or an "insured" on any automobile insurance policy as discussed above and you were a pedestrian or on a bicycle at the time of the accident, then a policy of automobile insurance on any of the motor vehicles involved in the collision may pay your lost wages. Here again, the vehicle insured under the automobile insurance policy must be involved in the accident.
You will note that with regard to the above automobile insurance policies, I state that the applicable policy "may" pay your lost wages. This is because in Pennsylvania, income loss benefits (lost wages) is an option and not a requirement on automobile insurance policies. Thus, once you identify the applicable automobile insurance policy, you must next determine whether the policy provides income loss benefits. If it does, the most common option selected is for the policy to pay a maximum of $5,000, with a monthly limit of $1,000.
Furthermore, if you are the owner of a vehicle registered in Pennsylvania and you fail to insure that vehicle, then you are not eligible to recovery lost wages from the above first party automobile insurance policies. This is an intentional penalty imposed by the Pennsylvania legislature to motivate all vehicle owners to legally insure their vehicles. See 75 Pa.C.S. § 1714.
If you are either unable to recover first party lost wages as discussed above, or if the amount you recover from a first party policy discussed above is insufficient to fully compensate you for your lost wages, then you have the right to pursue your second option and that is to seek payment of your lost wages from the liability automobile insurance policy that covers the negligent driver that caused the accident. This is referred to as third party benefits, as it is based on your proving negligence. Unlike with first party benefits, there is no monthly cap. Here, the gross amount of your unrecoverable lost wages is recoverable from the negligent driver's automobile insurance company. In addition, since lost wages is an economic damage, you may recover your unpaid lost wages from a negligent driver's automobile insurance policy regardless of whether you are bound by limited tort or full tort. The limitations imposed by "limited tort" only applies to non-economic damages, such as pain and suffering.
If you are injured in a motor vehicle accident, either as an occupant of a vehicle or as a pedestrian, due to the negligence of another, you should consult with an experienced personal injury lawyer to obtain maximum financial compensation for your injuries, lost wages and medical expenses from the negligent driver's automobile insurance carrier.