Who Pays for Lost Wages in a Car Accident in Texas?
Missing work after a car accident can make it hard to keep up with bills and daily expenses. Texas law and insurance policies determine whether lost wages can be recovered and who is responsible. The options available depend on the details of the accident, the type of insurance coverage involved, and whether a lawsuit is necessary to recover what was lost.
Options for Recovering Lost Wages After a Car Accident in Texas
Personal Injury Protection (PIP) Coverage
PIP coverage is included in Texas auto insurance policies unless the policyholder rejects it in writing. It covers 80% of lost wages, no matter who caused the accident. Payments are typically processed quickly, usually within weeks. This is one of the fastest ways to recover lost income.
Liability Insurance from the At-Fault Driver
Texas follows an at-fault system, meaning the driver responsible for the crash is financially liable for damages, including lost wages. A claim can be made under the at-fault driver’s bodily injury liability insurance, but payment is not immediate. Compensation is only available after a settlement or court judgment, which can take months or longer if the claim is disputed.
Things to know when filing a lost wages claim under the at-fault driver’s insurance:
- Policy limits apply – Texas requires a minimum of $30,000 per person and $60,000 per accident. If damages exceed those limits, the injured person may not receive full compensation unless additional coverage or personal assets are available.
- Proof of lost wages is required – Insurance companies typically ask for pay stubs, tax returns, employer statements, and medical records to confirm that your injuries prevented work. Self-employed workers may need tax records, business records, invoices, or accountant statements.
- Delays and disputes are common – Adjusters may question the wage amount, argue that time off was unnecessary, or claim that a pre-existing condition contributed to the inability to work.
Uninsured/Underinsured Motorist (UM/UIM) Coverage
If the at-fault driver doesn’t have insurance or doesn’t carry enough to cover all losses, UM/UIM can help. Texas insurers are required to offer this coverage, though policyholders can reject it in writing. A claim goes through the injured person’s own insurance, which may speed up the process compared to fighting with the other driver’s provider. Still, insurance companies don’t hand out money easily, and getting a lost wages claim approved can take persistence and an experienced car accident lawyer who knows how to push back against unfair denials.
Workers’ Compensation (If the Accident Happened While Working)
A work-related car accident can qualify an employee for workers’ compensation wage benefits. Payments cover a percentage of lost wages, typically 70% to 75% of pre-accident earnings, but Texas law sets weekly maximum limits that may reduce the total amount received. Fault isn’t a factor, which makes the process more straightforward, but payments are rarely equal to a full paycheck. Workers’ comp may be the fastest option, but it usually doesn’t replace every dollar lost.
Suing for Lost Wages After a Car Accident in Texas
When a Lawsuit May Be Necessary
Insurance doesn’t always cover everything. If lost wages go beyond what an insurance policy will pay, filing a lawsuit may be the only way to recover the rest. Texas follows a modified comparative fault system, which means someone can only recover damages if they are less than 51% responsible for the accident. If the case goes to court, the amount awarded is reduced by the percentage of fault assigned to the injured person.
Lost Wages That Can Be Recovered
A lawsuit can include more than just a paycheck. Compensation may cover:
- Past lost wages – Income that wasn’t earned while recovering.
- Future lost earnings – If injuries affect the ability to work long-term.
- Lost benefits – Commissions, bonuses, retirement contributions, and other work perks.
- Self-employment income – Business records, tax filings, invoices, or client statements may be needed to show financial loss.
Lawsuits take time, and proving lost wages requires clear evidence like pay stubs, tax records, employer statements, or business financials. A successful case can sometimes recover more than what insurance might offer, but the process isn’t quick.
How to Prove Lost Wages in a Texas Car Accident Case
Lost wages aren’t automatically covered just because someone misses work after a crash. Insurance companies and courts need proof of income and documentation showing how much was lost. The stronger the evidence, the better the chance of recovering the full amount.
Documents That Support a Lost Wages Claim
- Pay stubs or tax returns – Show what was earned before the accident to establish a baseline for lost income.
- Employer statement – Confirms dates missed, pay rate, and any lost bonuses or commissions.
- Medical documentation – Verifies that injuries prevented work and backs up the claim.
- Business records – For self-employed workers, bank statements, invoices, contracts, or accountant statements can help show lost earnings.
Proving Lost Wages Without a Standard Paycheck
Not everyone has a simple payroll record to point to. Some claims take more effort to prove:
- Gig workers and freelancers – Irregular income can make it harder to calculate lost earnings. A history of past earnings, client invoices, or tax returns can help.
- Cash-based workers – Without pay stubs or direct deposit records, proving income may require tax documents, work schedules, or witness statements from clients or employers.
- Partial disability claims – If someone can still work but not at full capacity, insurance companies may argue over how much income was actually lost. Medical reports and expert opinions may be needed to show the long-term impact.
Clear documentation can speed up the process, but disputes are common, especially for workers with variable income. A good car accident attorney can help present the right evidence and push back if an insurance company tries to undervalue the claim.
Deadlines for Lost Wage Claims in Texas
Personal Injury Lawsuit Deadline
The Texas personal injury statute of limitations allows two years from the accident date to file a lawsuit (Tex. Civ. Prac. & Rem. Code § 16.003). Missing this deadline can result in losing the right to recover lost wages through the courts.
Insurance Claim Deadlines
Insurance policies set their own deadlines for lost wage claims:
- PIP and UM/UIM claims may have time limits outlined in the policy.
- Some policies require claims to be filed within a few months of the accident.
Reviewing the policy terms and filing as soon as possible will help you avoid delays or denials based on missed deadlines.
Limits on Lost Wage Compensation in Texas
Insurance Caps on Lost Wage Coverage
Insurance policies set limits on how much they will pay for lost wages:
- PIP covers up to 80% of lost wages, but only up to the coverage amount selected in the policy.
- Liability insurance is capped by policy limits, with Texas requiring at least $30,000 per person. If lost wages exceed this amount, additional compensation may need to come from UM/UIM coverage or a lawsuit.
Limits in Lawsuits
There are no caps on lost wage claims in personal injury lawsuits, except when suing a government entity. In those cases, state laws limit how much can be recovered.
FAQs About Lost Wages in Texas Car Accidents
Can I recover lost wages if I work multiple jobs?
Yes. If the accident caused you to miss work at more than one job, you can claim lost wages from all sources of income, as long as you provide documentation for each.
What if my injuries force me to take a lower-paying job?
If you can’t return to your previous job because of an accident-related injuries and have to take a lower-paying position, you may be able to recover the difference in earnings through a personal injury claim.
Can lost wages be recovered if I was injured as a passenger?
Yes. Passengers who were injured in a crash can seek lost wages through PIP, UM/UIM, or by filing a claim against the at-fault driver’s liability insurance.
What happens if my employer won’t confirm my lost wages?
If an employer refuses to provide a wage verification letter, other evidence like past pay stubs, tax returns, bank statements, and witness testimony from coworkers may be used. If necessary, an attorney can issue a subpoena for wage records, depose the employer, or work with a forensic accountant to establish lost income.
Can I claim lost wages for missed business opportunities?
Self-employed workers may be able to claim lost earnings from missed contracts, client work, or other income-generating activities. Business records, financial statements, and client correspondence can help show the financial impact.
Getting the Full Compensation You Deserve
Recovering lost wages after a car accident depends on the right evidence, timely action, and knowing where to file a claim. Insurance may cover some of the losses, but policies have limits, and companies don’t always pay without a fight. If lost wages go beyond what insurance provides, a lawsuit may be the only way to recover the rest. Strong documentation and legal guidance can make the difference in getting full compensation instead of settling for less.
If a car accident has left you without a paycheck, the Austin personal injury attorneys of Loewy Law Firm are ready to fight for the lost wages and full compensation you deserve—contact us at (512) 280-0800 or by email for a free consultation.