Loss of income versus loss of earning capacity

Residents from Louisiana who get involved in dangerous accidents may have to face financial repercussions. Sometimes, this may come in the form of financial loss. Two of the most common ways that an accident can hurt a person’s finances are through loss of income and loss of earning capacity.

According to The Free Dictionary, loss of income involves any situation in which someone’s source of income is terminated. In some cases, a person may be insured for it. Loss of income insurance is recommended for people who work in dangerous industries that have a high rate of accidents. In other cases, a person may not have any insurance to protect them from losing the source of their income. This can do a huge amount of damage, as a person is essentially left without the money they need to cover basic expenses like medical bills or even food.

Generally speaking, loss of income is considered temporary. It’s a one-time event in which a person’s current source of income has come to an end in some way. On the other hand, FindLaw shows that loss of earning capacity can be a longer-term issue. This sort of problem comes into play when a person’s physical, mental or emotional abilities have been permanently altered, making it difficult for them to hold jobs that might have been easier before the accident. Examples can include people with paralysis or back problems being unable to do heavy lifting, or people suffering from trauma struggling to interact with customers.

Both of these issues still result in a loss of money over time. People may struggle to keep themselves afloat in either scenario, making it important for those who are suffering from any financial loss to consider their options for compensation.