Does Car Insurance Cover Lost Wages After an Accident?

Last Updated on December 7, 2025

If you were injured in a car accident and can’t work, the financial impact can be overwhelming. Lost income is one of the most stressful parts of recovering from an accident. Fortunately, depending on the type of auto insurance you carry (and who caused the crash), you may be eligible to receive compensation for lost wages.

Below, we explain when car insurance covers lost wages, what types of coverage apply, and how to file a lost income claim correctly.

Key Takeaways

• Lost wages are often covered under liability, PIP, or uninsured/underinsured motorist coverage.
• Some policies exclude work-loss benefits, so reviewing your policy is essential.
• No-fault states allow you to claim lost wages through your own PIP coverage, regardless of fault.
• Proper documentation (doctor’s note, employer verification, tax records) is required for a successful lost wages claim.

Yes, Car Insurance May Reimburse You for Lost Wages

Many auto insurance policies provide compensation for lost income after an accident—especially if your injuries prevent you from working or performing essential job duties.

For example, if you’re a construction worker, retail employee, teacher, truck driver, or anyone who depends on physical ability to perform your job, an injury such as a broken bone, concussion, or back injury may leave you unable to work for weeks or months. In these cases, lost wages claims can be essential.

But whether your car insurance policy pays lost wages depends on your state and the type of coverage you carry.

Does My Car Insurance Cover Lost Wages?

Not all car insurance policies cover lost wages. However, several common coverage types do include lost income benefits:

Liability Bodily Injury Coverage (if the Other Driver Is at Fault):

If another driver caused the accident, you can file a lost wages claim through their bodily injury liability coverage. This compensates you for missed paychecks, medical bills, and more.

Uninsured/Underinsured Motorist Coverage:

If the at-fault driver does not have insurance—or doesn’t have enough—you may still recover lost wages through your uninsured/underinsured motorist coverage. If you don’t carry UM/UIM and the at-fault driver has no insurance, you may need to sue them directly, though success varies.

Personal Injury Protection (PIP):

In no-fault states and in some at-fault states, PIP coverage pays for medical expenses and lost wages no matter who caused the crash. Even if you caused the accident yourself, PIP can reimburse you for lost income up to your policy limits.

Some Auto Insurance Policies Exclude Lost Wages

Check your policy for wording such as “Exclusion of Work Loss (included).” If this appears in your contract, your insurer may have removed lost income benefits from your coverage in exchange for a lower premium.

These exclusions are especially common in PIP coverage. Many drivers opt for cheaper PIP plans that exclude work-loss benefits.

Do You Live in an At-Fault or No-Fault State?

Your ability to recover lost wages depends heavily on your state’s insurance system:

At-fault (tort) states: Most U.S. states follow an at-fault model, meaning you pursue lost wages from the at-fault driver’s insurance. If you caused the crash, you can only seek lost wages if you have optional coverages such as PIP or MedPay (depending on state rules).

No-fault states: Twelve states have no-fault insurance laws, requiring drivers to carry PIP. In these states, you file lost wages claims through your own PIP coverage—regardless of fault.

How to Claim Lost Wages

Lost wage claims require documentation. To successfully file a claim, you will typically need:

1. A Doctor’s Statement:

Your physician must verify your injuries, treatment plan, and the amount of time you are unable to work.

2. A Letter from Your Employer:

This confirms your job title, pay rate, work schedule, and the days missed due to your injuries.

3. Tax Documents (for self-employed workers):

If you are self-employed or a contractor, insurers may require tax returns, invoices, or profit-and-loss statements to calculate income.

4. Police Report:

This verifies accident details and supports your medical and wage-loss claim.

Some insurers also send a “work-loss form” to your employer or doctor that must be completed before benefits are paid.

How Much Can I Receive for a Lost Wages Claim?

The amount you can recover is usually straightforward. Insurers calculate lost wages based on:

• Your hourly or salaried pay rate
• The number of work hours or days missed

For example, if you earn $20 per hour and miss 40 hours of work, your lost wages claim would be worth $800.

Some insurers and states also allow compensation for “lost earning capacity” or missed professional opportunities, such as failing to attend a job interview due to accident injuries.

Conclusion: Consider Hiring an Attorney If You’re Struggling to Get Paid

If your insurer is delaying, undervaluing, or denying your lost wages claim, consider hiring a car accident attorney. Lawyers who specialize in auto insurance disputes can maximize your compensation and hold insurers accountable.

If you believe you are owed lost wage benefits after an accident, schedule a free consultation to explore your options.