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Can I Recover Compensation for Loss of Earning Capacity?

Posted On behalf of Pfeifer Morgan & Stesiak

on January 13, 2023


person in a wheelchairSome accidents result in devastating injuries. If those injuries are permanent, your ability to return to work at your full capacity may be significantly impacted. If you are unable to earn a wage, you have the right to pursue compensation for the earnings you would have made had you been able to return to work.

Below, we discuss some of the important factors to consider when pursuing compensation for loss of earning capacity as part of an accident claim.

If you have questions about your rights or want to discuss the facts of your claim, call our South Bend car crash lawyers today. The legal consultation is free of charge, and there are no fees while we work on your case.

What is Loss of Earning Capacity?

Loss of earning capacity refers to the income an injured individual would have made if he or she had not suffered an injury that prevented him or her from working at full capacity. These economic damages are the losses a person suffers until the end of his or her work-life expectancy.

A claim for lost earning capacity does not apply in every accident case, though. This type of compensation may only be available in cases where the injured person suffered a debilitating injury. For example, a construction worker who is paralyzed from the waist down after a serious car accident is not likely to return to his or her job after the injury. Since he or she is losing out on potential income, a loss of earning capacity claim applies.

There are some instances when a mental injury may also qualify for a loss of earning capacity claim. For example, someone who suffers a Traumatic Brain Injury (TBI) that limits his or her cognitive functions to perform his or her job. This is especially true if the injured victim’s job requires mental focus, such as in a teaching position or an engineer.

How is Lost Earning Capacity Different From Lost Wages?

Many people confuse a lost wages claim with a loss of earning capacity claim. However, they are quite different.

A lost wages claim only applies to the wages you lost out on while you were recovering from your injuries and unable to work. For example, if you suffered a broken leg and were unable to work for the time it took for your bones to heal. Once you recovered; however, you were able to return to your job.

How is the Value of a Loss of Earning Capacity Claim Determined?

The value of your loss of earning capacity is not determined by your actual earnings. Instead, these damages are calculated by evaluating your ability to earn a living after the life-changing injury.

Some important factors to consider include:

  • Age
  • Occupation
  • Prior work history
  • Experience in your field
  • Employment records
  • Comparative wage rates in your field
  • Level of education
  • Certifications/specialties

The amount of time you had been working at a specific job may also be important to consider. This is because your years of service to a single employer could mean you would rise in the ranks of the company faster had you not been injured. Therefore, your injury cost you more in earnings than if you had only been working at a job for a short period.

What If I Can Work a Different Type of Job?

One argument the insurance company will make to deny compensation for loss of earning capacity is that you can switch careers. While this may be possible in many cases, it does not apply to all. Some individuals with expertise in certain fields would take a significant pay cut to change professions.

Say your injury prevents you from working in one field or position at your current job but does not prevent you from taking on a different job. Any pay cut you suffer as a result must also be taken into consideration when determining the value of your loss of earning capacity claim.

For example, if you are a construction worker who is paralyzed, but you can get a job within the same construction company behind a desk, you still qualify for a loss of earning capacity. It just may be valued at less than if you were unable to work entirely.

How Can I Prove My Injuries Prevent Me From Working?

To successfully recover compensation for a loss of earning capacity claim, you must be able to prove your injuries prevent you from working.

Your medical records can show the insurance company the extent of the injury you suffered. Testimony from your doctor could establish how your injuries are so severe that you are unable to work. Lastly, testimony from your employer could show you are incapable of performing necessary tasks at work.

Call Today to Schedule a Free Consultation

If you have questions about your legal rights after an accident, call us today. We can discuss your situation during a free consultation and determine if you may have a case.

There are also no fees while we work on your case.

Call (844) 678-1800 today.

Pfeifer, Morgan & Stesiak

Serious Attorneys for Serious Cases

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