Average Weekly Wage

Definition - What does Average Weekly Wage mean?

An average weekly wage is a number used to calculate disability insurance benefits when a person becomes disabled by an injury or illness covered by their policy. Calculating this figure is primarily relevant for worker's compensation and disability insurance.

Insuranceopedia explains Average Weekly Wage

If people become disabled but don't have disability insurance and aren't eligible to collect worker's compensation benefits, they can quickly lose their savings and become broke. However, in order to determine how much disability insurance or workers' compensation coverage a person gets, their average weekly income must first be calculated. Since these benefits are meant to compensate for lost wages, the benefits issued will be based on this figure.

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