How Lost Earning Capacity Is Calculated in Tempe Car Accident Cases
Not all car accident injuries in Tempe are immediately visible on an X-ray or in an ER report. For many victims, the most damaging part of a serious crash isn't just the hospital bills—it's the long-term impact on their ability to work and earn a living. If you’ve suffered an injury that limits your career, Arizona law allows you to recover for lost earning capacity, a type of damage that can be difficult to calculate—but incredibly important to claim.
At Tempe Car Accident Attorney, we help clients pursue full compensation for not just what they’ve already lost—but what their injuries will cost them in the future.
What Is Lost Earning Capacity?
Lost earning capacity refers to the reduction in your ability to earn income in the future due to an injury. This is different from lost wages, which are the paychecks you missed during recovery. Lost earning capacity focuses on long-term consequences—like the inability to return to your previous job, reduced hours, or the need to take lower-paying work because of physical or cognitive limitations.
If your accident occurred in North Tempe and left you with chronic back pain or a spinal cord injury, for example, and you can no longer do physically demanding work, that’s a clear basis for a lost earning capacity claim.
When Can You Claim Lost Earning Capacity?
Not every injury results in a long-term work impact. However, many common crash-related injuries do reduce earning ability, including:
Paralysis or loss of limb function
Spinal cord damage
Orthopedic injuries (e.g., crushed hands, knees, or hips)
Chronic pain that limits physical labor
PTSD or psychological trauma that affects job performance
Whether your crash happened near Downtown Tempe or during a late-night Uber ride in South Tempe, your earning potential matters just as much as your immediate medical bills.
How Is Lost Earning Capacity Calculated?
Unlike lost wages, which are based on simple math (hours missed × hourly rate), lost earning capacity involves projections. Your attorney must work with economic and vocational experts to estimate how much income you will miss out on over the course of your working life.
Factors considered include:
Your age and expected retirement age
Your education and work history
The physical or cognitive limitations caused by the injury
Past income tax returns and pay stubs
Your profession and industry wage trends
Expert testimony on your ability to return to work
For instance, if you were earning $70,000/year as a construction foreman and can now only work part-time at $35,000/year due to mobility limitations, your annual loss is $35,000. Over 20 years, that’s $700,000 in lost earning capacity—and potentially more with inflation.
These projections are commonly used in DUI crashes, T-bone collisions, or rideshare accidents where severe, disabling injuries are common.
Do You Have to Be Fully Disabled to Qualify?
No. You don’t need to be permanently disabled or completely out of work to make a lost earning capacity claim. Even partial reductions in earning ability may qualify. Maybe you can still work—but only part-time, or in a role with less responsibility, fewer hours, or lower pay.
For example, a warehouse employee in Meyer Park who suffers a knee injury may no longer be able to lift heavy objects or climb ladders. Even if they find a desk job, the wage difference may justify a significant lost earning capacity claim.
How Is Future Loss Proved?
Proving future losses is often the hardest part of an injury case—and it’s where insurers push back the most. To succeed, you’ll need strong expert support:
A medical expert to explain the long-term impact of your injuries
A vocational expert to assess your physical or cognitive limitations
An economic expert to project future earnings and inflation impact
This is particularly important in cases involving hit-and-run accidents, distracted driver collisions, or any crash where the insurance company is denying the long-term consequences of your injuries.
What If You Were Self-Employed?
Lost earning capacity isn’t just for hourly employees. Freelancers, contractors, and small business owners can also make claims—though they often require deeper documentation. You may need:
Prior years of tax returns
Profit and loss statements
Business bank account history
Client contracts or invoices
Testimony about changes in workload or productivity
A business owner in Holdeman who suffers a TBI and now has difficulty managing operations may have a valid claim—even if income technically hasn’t dropped yet. The ability to grow or sustain the business is part of the evaluation.
What If the Injury Exacerbated a Preexisting Condition?
Arizona law allows injury victims to recover for lost earning capacity even if a preexisting condition was worsened by the crash. For instance, if you had a prior back injury but were fully employed until a rear-end collision worsened it to the point of partial disability, you may still recover damages for the difference in earning ability.
This is where clear medical documentation—and often, a detailed narrative from your treating physicians—is critical.
Is There a Cap on What You Can Recover?
No. Arizona does not place caps on economic damages like lost earning capacity. This means if your injury has truly altered your career path, the value of your claim could reach into the hundreds of thousands—or even millions—depending on your age, skillset, and industry.
This kind of compensation is common in pedestrian crashes, uninsured driver collisions, and catastrophic injury cases throughout Tempe.
Final Thoughts: Future Income Is Future Security
If you’ve been injured in a Tempe car crash, your career trajectory may change in ways you don’t fully realize at first. Don’t let the insurance company treat your long-term earning ability as a side note. With the right legal support and expert analysis, you can pursue full compensation for the future income your injury may cost you.
To learn more about long-term financial recovery after a crash, visit our legal resources or contact our team directly.
