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Dealing with lost ability to earn income

I started a previous post by asking what your family would have to do without if you were faced, effective immediately, with having to pay a few hundred dollars a month for treatments due to a car crash injury.

As difficult a question as that might be to answer, what about if your injuries impacted on your ability to earn a living?

The closest I have come to being disabled due to an injury was a couple of years ago when I went snow boarding for the first time, without a lesson.  After a day of falling on my behind so many times, my neck had seized up, to the point that I couldn’t feed myself the calamari we ordered at the Gasthaus that night.  There was my wife, cutting my food for me and forking it into my mouth.

Assuming that the pain and stiffness would quickly resolve, I toughed it out and didn’t skip a beat at work, though it hurt like heck for a couple of days and my productivity wasn’t exactly stellar.  As expected, the pain and stiffness was completely resolved within about a week, with the help of a couple of chiropractic adjustments.

Many people who have been in car crashes are not so lucky.  Of course, the forces involved in a car crash are very different from the forces involved in landing on your butt in the snow.  Even when there is very little damage to the vehicles involved, you would be amazed at what happens to the body, particularly the neck, during a collision.  For many people, the pain lasts weeks or months.  For some, the pain never goes away.

When pain is at the “hurts like heck” stage, it doesn’t make a whole lot of sense to be at work.  Your family doctor will likely recommend that you take some time off to assist with recovery.  Depending on how long you suffer symptoms and how severe those symptoms are, your doctor may recommend that you stay off work for an extended period of time, and eventually may recommend that you retrain to get into another line of work.  Depending on your financial circumstances, however, it may not be so easy to follow those recommendations.

Those with excellent short and long term disability packages have it easy.  For most people who do not have those benefits, there’s Employment Insurance sick benefits, but they do not kick in immediately and when they do kick in, the benefits cover only a fraction of your income loss.  What about auto insurance?  There is a formula that maxes out at $300.00 per week (yes, that’s a maximum), and is reduced to the extent you are entitled to EI.

What about the law that says that the negligent driver (through his insurance company) is responsible to compensate you for 100% of your income loss?  Unfortunately, that law is enforceable only in a lawsuit that may not conclude until several years after the crash.  What happens in the meantime?  Unless you have savings you can draw on, you are at the mercy of the insurance adjuster.

As I’ve stated previously, it is the duty of the insurance adjuster to settle injury claims for as little as possible.  Given that duty, how much mercy can you expect to get from the adjuster?  The combined claims of income loss and loss of income earning capacity are often the largest components of a personal injury claim.  How does the adjuster minimize those components of your claim?

On the one hand, keeping you away from the likes of me is very important.  Most people have very little concept of what their rights are, particularly with regard to their right to be compensated for a loss of capacity to earn income.  It is very cost effective to keep you in the dark about those rights!  This weighs in favour of paying your income loss up front to gain your trust.

On the other hand, the sooner you return to work the lower the actual income loss will be.  What better way to force you back to work than to have you face missing a couple of mortgage payments?  You may need narcotic medication to make it through your shift, and you may not have any energy left at the end of your shift to relate to your family or have anything of a life, but at least you keep your home.

Of course, I only see the cases that come through my office, and in those cases I’ve seen adjusters typically using the 2nd approach, but sometimes using a combination of both approaches.  When they are cut off, my clients are typically told by the insurance adjuster that the adjuster “can’t” pay the full income loss, or “can’t” continue paying the full income loss if it has been paid for a period of time.

Perhaps their playbook policies dictate that they “can’t”, but I assure you that there is no law in this jurisdiction preventing insurance companies from being fair and reasonable!

Are insurance adjusters nasty creatures?  Absolutely not.  Insurance adjusters are people too.  They have families and feelings.  They are also very well trained and very capable of their job, which is to settle car crash claims for as little as possible.

Published February 18, 2007 in the Kelowna Capital News