Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Melanie Musson is the fourth generation in her family to work in the insurance industry. She grew up with insurance talk as part of her everyday conversation and has studied to gain an in-depth knowledge of state-specific car insurance laws and dynamics as well as a broad understanding of how insurance fits into every person’s life, from budgets to coverage levels. She also specializes in automa...

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Reviewed by Melanie Musson
Published Insurance Expert

UPDATED: Mar 13, 2020

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Auto accidents are a major inconvenience, and injuries make accidents even worse. Even relatively minor accidents can cause lingering injuries to the soft tissues of a person’s neck, shoulders or upper back; these types of injuries can be very persistent and may take several weeks or months to heal completely. Injuries can quickly become expensive due to medical bills, prescriptions and time missed from work. Fortunately, it may be possible to recover some of these expenses through insurance after an accident.

Whose Insurance Covers Injuries?

Insurance laws vary from one state to the next, and injury laws are especially state-specific. Because some states handle injuries differently from others, it’s important to understand what state laws may apply in a specific situation and how those laws affect the insurance coverage. Depending on your situation, it may be helpful to hire a lawyer. Personal injury lawyers are well-versed in local insurance laws and can help procure a higher settlement in some cases. Lawyers are not always necessary, however, and the insurance adjuster for a claim should be able to answer any questions you may have about your coverage.

No-Fault Insurance States

Some states are called “no-fault” states. In no-fault states, a person’s own auto insurance must be primary in paying for injuries no matter who caused the accident. You cannot file suit against another person except under certain limited circumstances, and there are limits to what a person can be sued for. These states require all drivers to maintain personal injury protection (PIP) or medical payments coverage in order to register a vehicle. This coverage pays for injuries sustained by a policyholder, listed driver or any resident relatives living with the policyholder.

The majority of states are called “tort” states, and they allow a person to file a claim or lawsuit against another person for injuries sustained in an auto accident. If someone causes an auto accident, his bodily injury liability insurance is responsible for paying the medical expenses for the other parties involved; if the liability insurance is not sufficient to cover the claim, he can be sued for the rest out of pocket.

Are Lost Wages covered under Car Insurance?

For persons living in a no-fault state or who are utilizing their own auto insurance policies for a claim, the PIP or medical payments policy will determine what is covered. Most insurance policies provide PIP coverage with a maximum limit. Whenever a claim is filed, the insurance company will assess the injuries and offer a settlement that includes doctor’s visits, medication costs, pain and suffering, and lost wages. The entire insurance settlement may be paid to the insured person, or the settlement may be paid directly to the doctors.

Not all PIP coverage will pay for lost wages, so it’s important to review the policy details carefully to confirm exactly what can be paid under the coverage. It’s also important to hold on to any receipts for claims-related expenses so that they can be reimbursed if possible.

If you live in a tort state and are filing the claim against another person’s insurance, you may be able to recover lost wages from that person’s insurance company. Be sure to provide proof of employment, the amount of time missed and the total cost of your missed time. The insurance company will review your claim and offer settlement based on the total cost of your medical expenses. The insurance company may offer to pay certain large claims through structured settlements and annuities rather than a lump sum payment, but the final choice is yours whether or not to accept this.

Some states have special laws concerning lost wages or pain and suffering payments. For example, some states will only offer lost wages as part of an insurance settlement to people who have a car insurance policy; they will not pay for injuries received by drivers who are uninsured.

Because insurance laws can become so complex, you may wish to consult with an attorney during the claims process to make sure you understand the laws in your state. You should also never be afraid to ask the insurance adjuster questions about the claims process. By taking the time to understand your rights and the way that coverage applies to your accident, you can be sure to receive the money that you deserve from any claim you’re involved in.