On a car insurance policy what does loss of income cover?

UPDATED: Aug 30, 2011

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UPDATED: Aug 30, 2011Fact Checked

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Asked August 30, 2011

1 Answer

Loss of income coverage is meant to provide you with the wages lost due an accident. This might include your hourly wages, or a calculated amount of money lost due to an inability to perform your job while injured.

The exact terms and amount of loss of coverage insurance will be explained on your policy. Because insurance companies set their own policy specifications and are in turn regulated on a state by state basis, there is no broad definition of what the coverage would mean to a particular person if it were needed. Read your policy carefully and if you are unable to find the details on loss of coverage, contact the company directly to find out what you need to know.

Loss of income coverage includes the insured driver and any passengers in the vehicle at the time of the accident. For example, you are entitled to recover lost wages, along with your spouse or working child and any friends or relatives who were victimized by the accident. Again, the exact rules of coverage vary by location and company and your policy may have exclusions that limit coverage to certain people or circumstances, and may only offer a percentage of the full lost income.

If you are injured in an accident and unable to work, loss of coverage could be the difference between a minor setback and financial ruin, depending on how long you are unable to work and how closely your home budget is structured. One thing for certain is that not having the coverage means that you will not be able to regain lost wages and work hours, and will have to shoulder the financial burden such lost wages creates.

Answered August 30, 2011 by Anonymous

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