Following a car accident, an injured person may be in the position where they are too hurt to immediately return to work. In New Jersey, we use the term “lost wage claim” to describe a claim made to recover lost wages that were never earned because of an accident. Unfortunately, lost wage claims could take a significant amount of time to resolve. Although a lost wage claim is typically the most straight forward portion of an accident case, the defendant’s insurance company will not make any payments unless they are settling the lost wage claim along with the claim for pain and suffering (and other losses) caused by the accident – and those portions of the case take much longer to fully develop. They will only try to settle claims for damage to a vehicle at the early stages, but that is the exception.

This presents a hardship for many injured people. They legitimately are not able to work, but they must wait an extended period of time to get reimbursed for those lost wages. Because of this, we advise our clients to look at their options under their own auto insurance policies… sometimes, they will find a pleasant surprise.

In New Jersey, there is a portion of auto insurance coverage called “income continuation benefits”. This is a benefit that pays for lost wages, and much quicker than trying to collect from the defendant’s insurance company. It is not mandatory that the policy include income continuation benefits, but it is mandatory that the insurance company offers these benefits for sale whenever they sell or renew a policy. If you are injured after a car accident and cannot go back to work, you should look at your policy and contact your insurance agent so you can make a claim.

Many good insurance agents recommend income continuation benefits or even roll it into the initial insurance quote by default. This is because the benefit it usually very cheap – perhaps only a few dollars a year. Therefore, an injured person may be pleasantly surprised to find out that they had this benefit all along.

However, you should note that there are a range of options for the benefit. At the lowest end, the benefit only pays $100 per week and a maximum of $10,400 payed in total on the claim. At the highest end, the benefit pays $700 per week and there is no maximum that they will pay on the claim. But note that the most that you can receive is 75% of the total weekly wages that you would have earned had you been able to work.

Lastly, you should note that income continuation benefits, by law, are bundled into a package of benefits that include essential services benefits, death benefits, and funeral expense benefits. The key to this is the essential services benefits, which pays for household services that the injured person would have normally performed themselves. It is typical that if a person is too injured to work then they are too injured to do their own landscaping, house cleaning, etc. Those services may be performed by hired help and then reimbursed under the essential services benefits under the policy.