Brian White | November 16, 2022 | Personal Injury
Loss of income and loss of potential earnings are two components of damages in a Texas personal injury claim. They might sound similar, but they are distinctly different from each other – and it is important to understand where they diverge.
What Is Loss of Income?
When you suffer an injury in a car accident, you might not be in a condition to work the next day. Any time you spend in the hospital or at home recuperating might come out of your pay. If another party was at fault for your injuries, you deserve compensation for the loss of income you suffered while off work because of the accident.
You also deserve compensation for sick leave and vacation time, even if your employer paid you for these days off. You deserve compensation because once you use your sick leave and vacation time, you have that much less of a cushion against future illness and that much less time available for vacation.
What Is Loss of Earning Potential?
Loss of earning potential is an element of compensation that applies when you suffer a long-term or permanent injury. The difference between loss of potential earnings and loss of income is that loss of income applies to income that you have already lost, while loss of earning potential applies to losses that you anticipate suffering in the future.
It is critical that you calculate your loss of earning potential accurately. If you underestimate it and run out of money years from now, there will be no way to obtain more money. The problem is that calculating future lost earning potential can be very difficult.
Factors To Consider When Calculating Loss of Earning Potential
To calculate the loss of your earning potential, you may have to consider the following factors, among others:
- Your age. The younger you are, the more future income you are likely to lose.
- Your health. If you were in poor health before the accident, you might not have been able to work much longer anyway.
- Whether you were partly to blame for the accident. A Texas court will deduct an amount from your compensation that exactly equals your percentage of fault for the accident (15%, for example). And if you’re 51% or more at fault, you cannot receive compensation.
- The length of your incapacitation, if it is temporary.
- The extent to which the accident reduced your life expectancy.
- Whether you will be able to return to work. If you cannot, then all of your future earnings will be lost, and you will qualify for more compensation.
- The extent to which your work activities will be limited. If you have to work half-time after the accident, you will lose the other half of your earnings.
- The number of years until your expected retirement. You might not expect any earnings after your retirement.
- The terms of your employment contract, especially with respect to your pre-accident pay.
- Your work history.
- Your work ethic. The harder you usually work, the more money you will lose when you can’t work anymore.
- Your career goals before the accident. The more ambitious they were, the greater your loss of earning potential.
- How much you were earning before your accident.
- How fast you were advancing within the company prior to the accident. Your loss of earning potential claim might take into account expected future promotions.
- Your company’s policies on promotions and other benefits.
Many of these items are impossible to prove with precision, so hiring an expert could become necessary.
Proving Loss of Earning Potential
You might need to bring in a forensic economist as an expert witness to determine the value of your future income. Neither the insurance company nor the court is legally bound to accept this determination. A court, however, has no vested interest in denying the professional opinion of a credible expert. If you can convince the insurance company that a court would likely side with the expert, the insurance company might cave into your settlement demand.
Speak With a Houston Personal Injury Lawyer
You cannot demand the full value of your personal injury claim if you are not certain how much it is worth. However, an experienced Houston personal injury lawyer is likely to have handled hundreds or even thousands of cases like yours. Let a lawyer measure the value of your claim and use it to win a settlement for you.
Contact the Houston Personal Injury Lawyers at Attorney Brian White Personal Injury Lawyers For Help
For more information, contact the Houston personal injury law firm of Attorney Brian White Personal Injury Lawyers by calling (713) 500-5000.
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