Lost wages coverage

Lost wages coverage is an insurance provision that reimburses policyholders for income lost due to injury or illness covered by the policy. Auto insurance policies in states like New York and Pennsylvania include lost wages coverage as part of personal injury protection (PIP).

Workers’ compensation policies pay a percentage of lost wages, typically 66% of average weekly earnings, during disability periods. Lost wages coverage activates after a qualifying event, such as a car accident or workplace injury, prevents work attendance.

Claimants must provide documentation–such as employer wage statements and medical records–to verify income loss. Policies set maximum limits; for example, Florida PIP covers up to $10,000 total with 60% allocated to lost wages, as stated by Your Insurance Info.

Exclusions often apply to self-employed individuals unless they submit additional proof like tax returns or business receipts. Payment timelines vary but most insurers process valid claims within 30 days of receiving complete documentation.

Lost wages coverage does not compensate for future earning potential beyond the policy period specified in contract terms.