Understanding Lost Wages vs. Lost Earning Capacity in a New Mexico Personal Injury Settlement

by | Sep 29, 2021 | Injuries

Most people in New Mexico do not understand how compensation for lost wages or lost earning capacity works until they file a personal injury claim. An accident can cause injuries that make you unable to work for weeks, months, or a longer period of time. If the accident leaves you disabled, you may have lost your earning capacity for the future. When another party or entity causes an accident resulting in injury to you, they can be held responsible for your lost wages, lost earning capacity, and other accident-related losses called “damages.”

At Dominguez Law, we help those who are suffering due to another’s negligent or reckless actions. If you’re considering legal counsel, reach out to our team of personal injury lawyers in Albuquerque for support. We offer free consultations for all personal injury cases.

What are Damages after a Personal Injury Accident?

Damages may be awarded to a personal injury victim if their personal injury claim succeeds in holding the responsible party legally accountable for their actions. Damages are financial payments made to a personal injury victim intended to cover a variety of expenses associated with the injuries the victim suffered.

Typically, damages encompass medical costs; however, compensation is also awarded for emotional pain and suffering. The law allows for the recovery of losses and damages in the form of compensatory damages.

Compensatory Damages in a Personal Injury Case

Most damages included in a personal injury case are listed as compensatory. Compensatory means “intended to compensate or make up for” what the victim lost due to an accident or injury. Compensation is the legal resolution to making the plaintiff “whole” again financially.

Determining a dollar amount for damages from an accident can be an arduous task. Physical damages are easy to monetize, such as reimbursement for medical bills or property damages; however, other damages can be challenging to assess. Assigning a financial value to pain and suffering or loss of enjoyment due to injuries related to the accident can be challenging.  Compensatory damages are assessed based on the following:

Lost Income and Earning Capacity

You may receive compensation for the accident’s impact on your wages and earnings. The compensation should cover the income you lost due to the accident and money you will not make in the future.

Medical Treatment

The compensation for damages included in a personal injury award typically cover the costs of the plaintiff’s medical care associated with the accident or injury. A compensatory damage award should consist of reimbursement for the treatment you have already received due to the accident or injury, and it should cover the cost of future medical care.

Property Loss

If tangible property, such as automobiles, personal objects, etc., was damaged in the accident, you would likely be entitled to reimbursement for the necessary repairs. If the item was damaged beyond repair, you would probably receive compensation to replace the item.

Pain & Suffering

Compensation for pain and suffering is meant to make up for any pain you suffered during and after the accident.

Emotional Distress

Compensation for emotional distress is intended to compensate for any psychological pain caused by the accident, such as fear, anxiety, loss of sleep, and depression. In some states, emotional distress damages are considered part of pain and suffering.

Loss of Enjoyment

Suppose you sustained injuries from the accident that prevented you from participating in recreational activities, exercise, and hobbies you enjoyed before the accident. In that case, you might receive damages to compensate for this loss of enjoyment.

Loss of Consortium

Injuries from an accident can affect your relationship with your spouse and children. You should be compensated for the loss of companionship and the loss of a sexual relationship with a spouse. Compensation might be awarded for damage to the relationship between a parent and child due to the accident.

Compensatory damages are a complex area of the law in New Mexico. You may need help to accurately estimate your damages and losses from an accident or personal injury. Dominguez Law can help you determine the dollar amount of your compensatory damages and fight for the financial compensation you deserve.

The Difference Between Lost Wages and Lost Earning Capacity

You should gain a basic understanding of the difference between lost wages and lost earning capacity. Both of these types of compensatory damages can come into play in a personal injury case.

Lost Wages

A loss of wages refers to money you would have earned by working if you had not been injured. Lost wages accrue from the time you are injured in an accident and must take time from work for medical treatment and recovery to the time your claim settles. Lost wages are calculated using all lost hourly wages, bonuses, commissions, overtime, tips, sick days, vacation time, and other sources of income that you lost due to your injuries before you filed a lawsuit.

Lost Earning Capacity

The loss of earning capacity is income you would have been able to make in the future if the accident had not taken place. Your loss of earning capacity will only last from the time you file a claim until as long as you cannot work. If you have a short or long-term injury or a permanent disability from the accident, you could be faced with the loss of earning capacity. Your disability may make it impossible for you to go back to work temporarily or permanently. Loss of earning capacity is a calculation of lost wages, overtime, commissions, bonuses, sick leave, vacation time, work benefits, stock options, 401K contributions, and other income sources after you file a lawsuit.

In a personal injury case, you will be seeking compensation from the at-fault party’s insurance company. An experienced personal injury lawyer can negotiate with the insurance company to make sure you receive fair compensation for lost wages and lost earning capacity. If the insurance company plays hardball, you will need a tough litigation team, such as the one at Dominguez Law, who can take your case to trial and maximize your recovery.

Speak with an Albuquerque Personal Injury Lawyer at Dominguez Law Today

With an expert team of Albuquerque personal injury lawyers by your side, we can help you navigate the legal system and may be able to ensure that you are completely compensated for any injuries or damages.

At Dominguez Law, we believe in holding parties who act negligently accountable for their actions. We are a tough litigation team dedicated to retrieving the maximum compensation that accident victims are entitled to receive. For a complete and free evaluation of your case, call us at (505) 317-9837 or go online to our contact form.