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Calculating lost earning potential for a claim is challenging

On Behalf of | Apr 30, 2023 | Personal Injury Law

Auto collision claims are sometimes very straightforward. A car crash scenario that only results in minor property damage losses is a perfect example. There may be a collection of invoices for the expenses generated by the incident, but nothing more.

However, there is often more subjectivity to the ins and outs of a personal injury scenario. It can be hard for people to know exactly what the claim is worth when they have to consider future losses, including lost earning potential.

Calculating short-term lost wages is usually easy, as someone knows exactly how long they missed work for and what their income would have been had they not needed to take any time off. But, when someone will have to change professions or will never work again, it becomes significantly more challenging to determine what their lost wages are actually worth. This is how people begin to calculate lost future wages.

They look at both base pay and benefits

One of the most common oversights people commit when calculating the financial impact of an injury on a household is that they wrongfully assume that someone will continue earning the same amount for the rest of their career. Even if someone is not particularly ambitious, they will typically still receive cost-of-living wage increases occasionally they will drive up their annual income. Those who want to climb the corporate ladder would eventually move into different jobs that offer far higher wages.

Workers have to think about that future earning potential that they will never achieve and also the financial value of their lost workplace benefits, which add up to thousands of dollars a year because they can be worth as much as a third of someone’s typical take-home pay.

Career changes may necessitate more than just insurance

When someone has to change their profession or will no longer be able to work at all, the limited compensation available through car insurance may fall woefully short of their true needs. Those expecting a lifetime of lost or reduced wages will often need to consider a personal injury lawsuit in addition to an insurance claim to more fully recoup their lost earning potential.

Seeking legal guidance in order to receive help establishing the true financial value of an injury is often an important early step for those intending to pursue a personal injury claim.