Who Pays Your Lost Wages for Lost Income Arising out of a Motor Vehicle Accident

Who Pays Your Lost Wages for Lost Income Arising out of a Motor Vehicle Accident

Posted By Law Offices of Thomas J. Murphy || 21-May-2013

The Commonwealth of Pennsylvania requires all Pennsylvania automobile insurance policies to offer as an option, Income Loss Benefits (lost wages) for motor vehicle accidents taking place in Pennsylvania. However, because this is optional coverage and not required coverage, you may or may not be eligible for this coverage. Also, please note that Income Loss Benefits are not based on who negligently caused the accident. Income Loss Benefits are payable no matter who caused the accident. Assuming Income Loss Benefits are available in one or more of the automobile insurance policies applicable to the accident, you must first identify which automobile insurance policy is responsible to pay your Income Loss Benefit claim. The Pennsylvania legislature set forth an order of priority at 75 Pa.C.S. § 1713(a) of the Pennsylvania Motor Vehicle Financial Responsibility Law, which states that Income Loss Benefits are to be paid by applicable automobile insurance coverage in the following order:

  1. If you are a "named insured" on an automobile insurance policy, then that policy of insurance will pay your lost wages if the Income Loss Benefit option was selected on that policy, 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.
  2. 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" on will pay your lost wages if the Income Loss Benefit option was selected on that policy. 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 will pay your lost wages if the Income Loss Benefit option was selected on that policy, even if your relative's insured vehicle was not involved in the accident.
  3. 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 will pay your lost wages if the Income Loss Benefit option was selected on that policy. Here the vehicle insured under the automobile insurance policy must be involved in the accident.
  4. If you are not a "named insured" or an "insured" on any automobile insurance policy as discussed above and you were a pedestrian at the time of the accident, then a policy of automobile insurance on any of the motor vehicles involved in the accident will pay your lost wages if the Income Loss Benefit option was selected on that policy. Here again, the vehicle insured under the automobile insurance policy must be involved in the accident.

Because the payment of Income Loss Benefits is not based on fault, but rather is based on the above order of priority as determined by the Commonwealth of Pennsylvania, the insurance premium for the automobile insurance policy that pays your Income Loss Benefits should not be increased by the insurance company as a result of paying your Income Loss Benefits.

However, if you are the owner of a vehicle registered in Pennsylvania and you fail to insure that vehicle, then you are not eligible to receive Income Loss Benefits under any of the automobile insurance policies discussed above. 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.

Because the Income Loss Benefit is an option and not a requirement for automobile insurance policies issued in Pennsylvania, it is possible that you will not be able to recover Income Loss Benefits under the above automobile insurance policies. If you either are not eligible to recover Income Loss Benefits under the above automobile insurance policies or if you have recovered Income Loss Benefits and have exhausted the Income Loss Benefits on the applicable policy but still have additional lost wages, then under either situation you will still be able to seek your "excess lost wage claim" against the liability coverage of the automobile insurance policy that insures the negligent driver that caused the accident. Here, you must prove negligence to recover your excess lost wages (as well as your claims for bodily injuries and excess medical bills).

By enlisting the assistance of our knowledgeable firm, a Philadelphia personal injury attorney will assist you in making sure that you are fully compensated for your lost wages, medical bills and bodily injuries arising out of a motor vehicle accident.