Loss of Income After an Auto Accident

After you get into a car accident, there are immediate damages to worry about. For example, your injuries, injuries to your passengers, as well as any damage done to your car. However, the effects of the accident don’t stop there. During recovery time for any injuries you may have, you may have to stop working, causing you to have a loss of income after an auto accident. Or, you may have to miss work for doctor’s appointments. Of course, the worst-case scenario is that you won’t be able to work at all due to severe injuries from your accident. All of these can be categorized as loss of income.  

The top injury attorneys at Phoenix Accident and Injury Law Firm near you have more than 15 years of experience in helping clients who have lost income after an auto accident.  Our offices are conveniently located in nearby Chandler, Peoria, and North Phoenix, and we can meet in-person or over the phone or video call.  You can contact us for a free consultation, or read on to find out more.

By the way, we will also help with other problems that have cost you sleep, like getting a rental car very soon and finding a nearby doctor who can help you. Even the best legal team isn’t good enough if your quality of life isn’t sustainable while justice and compensation are on the way. The whole point of legal action is to regain quality of life, so we help you long-term as attorneys and short-term as your go-to people.

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What is Lost Income?  

Lost income is just what the name implies- any income lost while recovering from their injuries after an accident. Lost income includes wages that the injured person would earn if they hadn’t been injured.  

It’s important to know that loss of income after an auto accident is different that lost compensation, although you may get both in a settlement. Loss of income is the loss of wages, while lost compensation is the loss of benefits that the person may have had at their job if not for the accident. These include sick and vacation days, pay bonuses, and other perks.  

How Do You Prove Loss of Income After an Auto Accidents? 

In order to prove loss of income after an auto accident, you have a few relatively simple steps to go through. The first is getting a note from your doctor. Your doctor’s note should include a detailed write-up of your injuries, your diagnosis, and a prognosis for recovery. It should also outline your treatment and how long you should be out of work. You may also ask for a note that outlines when you can return to work, which activities you are limited to at work, and when you can return to your full job duties. The more detail that is included about your injuries, treatment, and recovery time the better chance you have of being reimbursed.  

Next, you need to show proof of income and other compensation you have lost during treatment. To do that, ask your employer for a written letter which should confirm:  

• How many days you’ve taken off because of the accident  
• Your hourly pay or salary at the time of the injury 
• The number of hours you normally work each week 
• Any overtime you worked in the weeks or months before the injury 
• Any projects you were working on that would have resulted in extra compensation 
• A promotion you were being considered for and is no longer available 
• Any lost prizes for work performance, including vacations, tickets to shows, etc. 
• Sick, bonus, and vacation days used up while recovering 
• Any other perks or benefits you lost 

How Do I Prove Income Loss If I’m Self-Employed? 

Self-employed people have the same right to recover loss of income after an auto accident like anyone else. However, gathering proof of that lost income can be a bit more challenging. Adjusters often consider lost income claims from the self-employed as suspicious. If your loss of income after an auto accident is substantial, you may need to hire an accountant. Typically, the person handling your books can create a profit and loss statement. It should prove your income before the accident and show a decline or loss of income after an auto accident. 

Proof of income can take many forms including: 

• Bank statements showing deposits 
• Profit and loss statements before and after the car accident 
• Your last year’s tax return 
• Signed contracts close to the time of the car accident 
• Invoices and receipts 

If your business is complicated, it’s worth hiring a forensic accountant who can look at the previous income and predict future income. They’ll also prepare a detailed forecast of future income factoring in the growth rate of your business, new customers, as well as compare the incomes of similar businesses in your area. If your business isn’t that complicated, you won’t need a forensic accountant- just a current financial statement and your tax returns for the past several years.  

If you were working with potential customers and lost them when you were injured, you can include copies of your correspondence to prove how close you were to bring them on. If you can get them to write a letter confirming they would have become a customer had you not been injured, that’s even better. 

Don’t be tempted to exaggerate your financial losses as every document submitted for evidence in your claim will be very closely scrutinized. Take your documentation to your usual accountant and ask them to prepare a financial report supporting your calculations (proof of income). The adjuster can’t refuse to reimburse your lost income simply because you’re self-employed, but they’re likely to dispute the amount requested at first.