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What car insurance should I carry in Louisiana?

What car insurance should I carry in Louisiana?

Car insurance in Louisiana is a critical component of responsible vehicle ownership. It protects both drivers and passengers in case of car accidents, ensuring that it minimizes financial burdens. Understanding the legal requirements, coverage options, and state-specific regulations is essential for all Louisiana drivers.

Louisiana Law Minimum Insurance Requirements

Louisiana law mandates specific minimum insurance coverage that all drivers must carry. These requirements provide a degree of financial protection if an accident occurs. The mandatory insurance coverage includes:

  • $15,000.00 for bodily injury
  • $30,000.00 for bodily injury per accident (if multiple persons are injured)
  • $25,000.00 for property damage per accident

If you are involved in an accident with an uninsured driver, uninsured/underinsured motorist (UM) coverage can insure you in a car accident. This coverage is beneficial in case of an accident with an uninsured or underinsured driver. It provides financial assistance for your injuries and damages when the other driver lacks insurance or has insufficient coverage.

What does Uninsured Motorist (UM) Insurance Cover

Underinsured/Uninsured (UM) coverage protects you in case of an accident with an underinsured driver. This coverage helps you if the other driver’s insurance can’t pay for your injuries and damages. Underinsured motorist coverage (UIM) is a crucial aspect of car insurance in Louisiana. UM comes into play when you are involved in an accident with a driver who carries insurance but not enough to cover all your losses.

Your UM coverage fills the difference between the at-fault driver’s policy limits and your expenses. Having UM coverage can be invaluable in situations where the other driver’s insurance falls short.

Louisiana has unfortunately faced challenges with uninsured drivers. According to the Insurance Information Institute (III), in 2019, an estimated 13.9% of drivers in Louisiana were uninsured.

The percentage is higher than the national average. The percentage is above the national average, which means insured drivers are at risk. If insured drivers get into accidents with uninsured drivers, they may have to rely more on their own insurance.

What do I have to prove to trigger Uninsured Motorist (UM) Coverage?

In Louisiana, in order to recover uninsured motorist (UM) coverage in the event of an accident with an uninsured driver, you typically need to prove several key elements. These requirements may vary somewhat depending on your specific insurance policy, but the following are generally the common elements:

  • Uninsured status of the other driver.
    • You need to prove that the adult driver in the accident didn’t have insurance at the time. This often involves providing evidence that the other driver lacked valid liability insurance at the time of the accident. Police reports, witness statements, or other documents like an affidavit of no extra insurance prove this.
  • Your Coverage.
  • Fault of the other Driver.
  • Notice to your Insurer.
    • You must provide timely notice to your UM carrier so as not to prejudice them.
    • You must show that your damages are related to the accident at issue.
  • Damages

The UM insurer needs proof of loss for coverage and to pay for the claim.

How long after I make a claim does UM have to pay for my claim?

In Louisiana, if you provide proof of loss to your UM insurer, they have 30 days to respond and make payment. Payment would be an amount that reasonable minds could not differ over.

Does my insurance agent have to tell me about UM coverage?

Insurance agents in Louisiana must offer UM coverage to policyholders. However, the policy holder has the option to reject UM coverage, even though they must offer it. If you don’t want UM coverage, you must fill out a form that follows Louisiana law.

Bad Faith Penalties for failure to comply with Uninsured Motorist Statutes 

In Louisiana and other states, insurance companies must handle UM claims honestly and fairly. If an insurance company fails to properly adjust a UM claim in accordance with the law, it may be subject to penalties and damages for bad faith. Here are some key points regarding bad faith penalties for mishandling UM claims in Louisiana:

1. Louisiana Revised Statute 22:1973 – Unfair Claims Settlement Practices:

This statute outlines various unfair claims settlement practices, including those related to UM claims. Regulatory authorities prohibit insurance companies from engaging in deceptive or unfair practices when handling claims. Considering an unfair practice, failing to adjust a UM claim properly in accordance with the law.

2. Penalties and Damages:

    • If an insurance company mishandles a UM claim in bad faith, the insured person may receive help. This help can come in different forms, such as compensation or other remedies.
    • Actual Damages: The insured party may recover damages directly related to the insurer’s bad faith conduct. This may cover medical costs, lost income, and other damages resulting from the mishandling of the UM claim.
    • Penalties: Louisiana law allows for penalties in cases of unfair claims settlement practices. The insurance company may face penalties in the form of fines for its wrongful actions.
    • Attorneys’ Fees: If the insured party prevails in a lawsuit against the insurance company for bad faith handling of the UM claim, they may be entitled to recover reasonable attorneys’ fees.
    • Consequential Damages: In some cases, the insured party may be able to recover consequential damages, which can go beyond the direct losses and include damages for mental anguish, inconvenience, and other related consequences of the improper handling of the claim.

It’s important to note that bad faith claims against insurance companies can be complex and fact-specific.

Does UM cover damages if I am the at-fault in a car accident?

 Uninsured motorist (UM) insurance typically covers your own bodily injury expenses when you are involved in an accident with an uninsured or underinsured driver who is at fault. It is designed to provide financial protection for you and your passengers in situations where the at-fault driver either has no insurance or does not have sufficient insurance coverage to compensate you for your injuries and damages.

UM coverage usually doesn’t pay for damage to your car or for injuries to others if you caused the accident. It helps cover your medical bills, lost wages, and other injury-related expenses when you’re not at fault. However, this only applies if the driver who caused the accident doesn’t have sufficient insurance to cover all your costs.

Uninsured motorist insurance doesn’t usually pay for damages if you cause an accident. It helps you when it’s not your fault and the other person doesn’t have insurance or enough coverage.

If you want coverage for property damage or liability when you are at fault, you would typically need other types of insurance, such as liability coverage or collision coverage, in your auto insurance policy. It’s important to review your policy carefully and understand the specific coverages and limitations it provides.

Should you purchase UM insurance in Louisiana? 

Deciding on uninsured motorist coverage and the amount to buy depends on factors like your situation, budget, and risk tolerance. UM coverage is important if you have an accident with a driver who doesn’t have insurance or enough insurance. Here are some considerations to help you decide:

Factors to Consider When Purchasing UM Coverage:

  1. State Requirements: Check your state’s minimum insurance requirements. Some states may require UM coverage, while others make it optional.
  2. Risk Factors: Consider the prevalence of uninsured or underinsured drivers in your area. If you live in an area with a high number of uninsured drivers, UM coverage may be more essential.
  3. Your Assets: Assess your financial situation and assets. If you have significant wealth, it is wise to purchase additional insurance coverage in case of a major accident. This will help safeguard your assets and financial well-being.
  4. Health Insurance: Evaluate your health insurance coverage. UM coverage can pay for medical costs. However, if you already have good health insurance, you may not need as much UM coverage for medical bills.
  5. Existing Coverage: Review your existing auto insurance policy. If you have health insurance and other coverage that may partially cover UM-related expenses, you might consider lower UM limits.
  6. Budget: Determine how much you are willing to spend on insurance premiums. Higher UM coverage limits typically come with higher premiums, so consider what you can comfortably afford.

How Much UM Coverage to Buy

UM coverage limits are often expressed as three numbers, such as 100/300/100. Here’s what these numbers mean:

  • $100,000 per person: This is the maximum amount the insurance company will pay for bodily injury per individual in your vehicle.
  • $300,000 per accident: This is the maximum total amount the insurance company will pay for bodily injury when multiple people in your vehicle are injured in the same accident.
  • $100,000 for property damage: This is the maximum amount the insurance company will pay for property damage caused by an uninsured or underinsured driver.

Choosing the appropriate coverage limits depends on your personal situation. Here are some guidelines:

  • Consider Higher Limits: If you have valuable assets or a high income, it’s often advisable to consider higher UM coverage limits to protect your wealth.
  • Balancing Act: Balance your need for coverage with your budget. Choose limits that provide a reasonable level of protection without causing financial strain.
  • Consult an Agent: Speak with an insurance agent or broker who can provide guidance based on your specific circumstances and local factors.
  • Review Periodically: Reevaluate your coverage needs periodically, especially if your financial situation or risk factors change.

Ultimately, the decision to purchase UM coverage and the coverage limits should align with your individual risk tolerance and financial situation. UM coverage can protect you in case of an accident with an uninsured or underinsured driver. This coverage can save you money by providing financial protection when the other driver lacks sufficient insurance.


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