No-Fault Explained: Unemployed Wage Loss

Michigan no-fault auto insurance covers up to three years of lost wages. But what about if you happen to be unemployed at the time of the accident?

The Michigan No-Fault Insurance Act entitles injured motorists for up to 85 percent of your lost wages after an accident for three years. According to MCL 500.3107a, these benefits apply to unemployed work loss. If you are temporarily unemployed when you are in an auto accident, you are still entitled to compensation for unemployed wage loss during the time you are medically unable to work.

In that case, you and your auto accident attorney will have to demonstrate your previous work experience, and that you are only temporarily unemployed. You should gather your past tax returns and pay stubs to show how much you earned before. Your car accident lawyer may also ask you about your job search efforts leading up to the accident, including job applications and interviews. This evidence will help show what kind of job you could have gotten had you not been injured.

This isn’t an award based on earning potential. If you are one of the thousands of Michigan residents who have given up on employment, or if you were disabled prior to your accident, your right to wage lost benefits could be cut short. Unemployed work loss benefits are intended to compensate injured drivers and passengers for the income they would have made except for the accident. They are not intended as a windfall for people who, for whatever reason, are otherwise unable to work.

Nor should you treat an auto accident as an excuse not to work. If you have filed an auto insurance claim and are later cleared to return to work, do so. You will only be able to collect unemployed work loss benefits for the time when you are medically unable to work. As soon as your doctors give you medical clearance, you should start looking for employment again. If you do get hired while your auto insurance lawsuit is pending, it can provide excellent evidence of the type of work you could have obtained without the accident.

Employment ability isn’t all or nothing. You may be able to go back to work part-time, or do a less demanding kind of work than you had done before the accident. Michigan law requires you to “mitigate” your losses. That means you need to go back to work, even if only part-time. If you meet your duty to mitigate, your no-fault benefits will kick in to pick up the slack for your unemployed wage loss.

The attorneys at Christensen Law can help you overcome your unemployment and make sure you get the wage loss benefits you need. Don’t let the fact that you weren’t working at the time of your accident stand in your way. Contact Christensen Law today to review your case.