Louisiana motorists are required to maintain liability insurance on their vehicles with minimum policy limits of 15/30/25. These limits represent $15,000 of bodily injury liability coverage for any person injured in an accident, $30,000 of aggregate bodily injury liability coverage for two or more people injured in an accident, and $25,000 of property damage liability coverage for all vehicles damaged in the accident.
While UM insurance is the most important elective coverage available under your car insurance policy, there are other noncompulsory coverages that are worth exploring.
Medical Payments coverage is not required under Louisiana law, but it is beneficial, especially if you do not have health insurance, or if you have a high deductible health insurance plan. Medical Payments coverage will pay any reasonable and necessary medical expenses that an insured person incurs as a result of a motor vehicle accident, regardless of fault.
Louisiana recognizes the importance of Uninsured / Underinsured Motorist coverage (hereinafter “UM”), and by law, UM coverage is automatically included in all automobile liability insurance policies issued in Louisiana in the same amount as the liability coverage. Louisiana Revised Statute §22:1295(1)(a)(i). However, you are allowed to reject UM coverage, or select UM coverage in an amount lower than your liability coverage, by executing a written selection form provided by your insurance company. Louisiana Revised Statute §22:1295(1)(a)(i). Notwithstanding your right to reject or select reduced UM coverage, the Shofstahl Law Firm, L.L.C. strongly recommends that its clients purchase unrestricted UM insurance for all vehicles. The following is a brief summary of the benefits of UM coverage.
The “Uninsured Motorist” portion of UM coverage will insure you, up to the limits of your policy, for injuries and damages caused by an uninsured motorist. For example, if you are rear-ended by another motorist who flees the scene and is never identified, this coverage will provide insurance for your medical expenses and pain and suffering resulting from the accident. The policy will also provide coverage to other injured occupants of your vehicle. If you do not have UM coverage, then you will not be paid anything for your medical expenses or pain and suffering under this scenario, regardless of the severity of your injuries.
The “Underinsured Motorist” portion of UM coverage will insure you, up to the limits of your policy, for injuries and damages caused by a motorist who does not have enough liability insurance to pay your claim. For example, if another motorist causes you to sustain bodily injury damages in a car accident of $25,000.00, but the motorist only has state minimum liability insurance limits of $15,000.00, your UM coverage will pay the $10,000.00 difference between the amount of the available insurance and the value of your damages. However, if you do not have UM coverage, then you would only receive $15,000.00 for your injuries under this scenario.
Diluting your UM coverage can also be a costly mistake. For example, if you have a 100/300/100 liability policy, then you have $100,000 of available coverage for any person you injure in a car accident. But, if you have selected lower UM limits of only 25/50/25, then you would only have $25,000.00 to protect yourself from serious injuries caused by an uninsured or underinsured motorist. Why maintain more insurance coverage for third-parties than for yourself?
Finally, you should avoid “economic only” UM coverage entirely. These policies only pay for “special damages,” which are economic damages that can be calculated with a mathematical certainty, such as lost wages and medical expenses. However, these policies do not cover “general damages,” which are damages that cannot be calculated with mathematical exactitude, such as past, present and future pain and suffering. Since general damages are the largest component of most settlements and verdicts, the “economic only” UM coverage is a great deal for insurance companies. Specifically, the insurer collects a premium only slightly lower than the premium for full UM coverage, but the insurer greatly reduces its risk because it will never have to pay general damages under the policy.
UM coverage is a valuable part of your automobile liability insurance policy, and you are not “full covered” unless you have unrestricted UM coverage protecting you and your family.
The coverages offered by your insurance company include various options such as liability, medical payments and uninsured/underinsured motorist (i.e., UM). However, Louisiana ONLY requires that you purchase liability coverage, which insurance pays for the bodily injuries and property damages you cause to third parties through your negligence while operating a motor vehicle.
Louisiana Revised Statute §32:900(B)(2)(a-c) requires that liability insurance policies on personal vehicles have a minimum coverage of 15/30/25. This means that there is $15,000.00 of available insurance for bodily injuries caused to one person, with an aggregate total of $30,000.00 of available insurance for bodily injuries caused to two (2) or more people in the same accident. Further, the policy must provide a minimum of $25,000.00 for property damages caused during the accident.
Liability insurance is intended to protect third parties from your negligence, but it does not compensate you for damages caused by their negligence. Unfortanately, many clients believe they have “full coverage,” when, in fact, they only have a liability policy. There are many other coverages available to protect you and your family from the fault of other drivers, which will be explored in my next blog.
Christian Shofstahl esq.
Personal Injury Attorney dedicated to maximizing recoveries for clients. Information contained herein does not constitute legal advice.