Wage loss insurance, also known as a wage-loss replacement plan (WLRP) is a type of insurance typically offered by Canadian employers to Canadian employees. These plans kick in when you cannot go to work as a result of sickness, accident, disability, or other reasons. They essentially replace your income until or unless you can return to work.
Benefits are paid in increments, essentially replacing your weekly paycheck.
There are similar plans available through private insurance policies, as well as through benefits offered by your car insurance company.
These plans can become available to the victims of personal injury cases and can help keep the bills paid while you’re waiting on a settlement. It can take up to 18 months for your personal injury claim to be resolved and the bills will just keep on coming, so it’s important to understand them and to know what your options are if you aren’t covered by wage loss insurance.
What is the difference between Wage Loss Insurance and Short Term Disability?
WLRP covers loss of income via accidents or illnesses obtained on the job. If you get into a car accident in the company car you’d generally collect WLRP. You can learn more about Alberta’s worker’s compensation program and wage replacement here.
If you take an injury off the job the short-term disability policy will generally kick in. Short-term disability usually pays up to 60% of your wages and will only payout for up to 6 months. This policy is usually included with your employer-provided life insurance policy.
Both benefit types are available through no-fault plans and the facts of the accident do not matter. You can obtain benefits regardless.
You might also have a long-term disability, which will cover you for much longer. These benefits can last up to two, five, or ten years, or until retirement, depending on the plans that you’ve purchased.
What can you do if you aren’t covered by wage loss insurance?
Your Section B coverage from your standard car insurance policy also includes a short-term insurance policy. Section B disability benefits cover 80% of your wages to a maximum of $600 a week for up to two years if you are unable to work after recovering from a car accident. You can also get some Section B benefits if you get WLRP, but the amount you receive will be reduced.
The Alberta Assured Income for the Severely Handicapped (AISH) program may be another source of funds to live on. This program provides you with a monthly living allowance, medical care, dental care, and more. You can receive AISH even if you receive a personal injury settlement, so long as your settlement is handled properly.
Should you buy your own disability policy?
Purchasing additional disability insurance can be an excellent idea, especially if you aren’t covered by an employer policy or want to make sure you’re fully covered in the event that you’re injured outside of work. Usually, short-term disability and long-term disability policies are sold as part of a life insurance policy package.
If you are part of a union, guild, or alumni association you may be able to get better rates with a group policy.
How does disability insurance interact with my personal injury case?
Some personal injury claimants are surprised to see that some parts of their settlement may get paid out to insurance companies who have paid benefits to them instead of directly to them.
Canadian law doesn’t allow anyone to receive a “double recovery.” That means you can’t be reimbursed for something in your lawsuit if you’ve already received that money from another source. If your Section B benefits pay for your lost wages then they can be reimbursed for reimbursing you.
If you received a loss of earning capacity benefit as part of your settlement that money would flow to you, as it wouldn’t have been paid out as part of a disability policy.
Are there other ways I can pay my bills while waiting on a personal injury settlement?
Waiting on a personal injury settlement is tough. Medical creditors might try to hound you for the money you can ill afford to pay while living only a portion of your old wages.
Once you’re working with an injury lawyer you do have recourse. You can simply direct these creditors to your lawyer. Your lawyer will allow them to sign a form that says they have a claim on your eventual settlement. They’ll know that they’re going to get paid and that you don’t have the resources to pay them right now. Typically they’ll then leave you alone, but they’ll receive their portion of the settlement funds before you receive your portion of the settlement funds.
Let your lawyer handle these sorts of problems before you do anything drastic. There are programs out there that loan out money to injury victims in anticipation of a settlement, but the interest rates can be high, and they can land you in even greater financial trouble if your settlement doesn’t pan out, or isn’t as high as you thought it would be.
Injured? We can help.
Most of the lawyers in our office have 20 to 30 years of experience handling personal injury cases for Alberta residents just like you. For example, our team has obtained generous pain and suffering settlements on our clients both because we are savvy negotiators and because we are absolutely fearless litigants. We fight for you, and we fight hard.
We’re responsive and kind to clients though, and take the time to answer your questions, meet your concerns, and explain the process to you at every step of the way.
We’re also convenient for you! You don’t have to leave your bed if you don’t want to. We’ll meet with you via Zoom and start the process on your behalf. We can even deal with insurance companies for you! Call (780) 413-9777 to set up your risk-free appointment today.