Louisiana Auto Insurance: What You Need To Know

In Louisiana, drivers are required to have a minimum level of auto insurance, known as liability insurance, in order to be legal on the road. The minimum coverage includes $15,000 per person and $30,000 per accident in bodily injury liability insurance, as well as $25,000 in property damage liability coverage. This means that if a driver is at fault in an accident, their insurance will cover the medical expenses and property damage of the other party, up to these specified amounts. Louisiana also has a no pay, no play law, which means that drivers without insurance may be unable to collect insurance payments for an accident where they are not at fault. Driving without insurance in Louisiana can result in penalties such as fines, suspension of driving privileges, and vehicle impoundment.

What are the minimum insurance requirements?

In Louisiana, drivers are required to carry a certain amount of car insurance to be legal on the road. The minimum liability coverage amounts required in the Pelican State are $15,000 per person and $30,000 per accident for bodily injury, and $25,000 per accident for property damage. These limits are often referred to as 15/30/25.

It's important to note that these state-mandated minimums are the lowest coverage required by law, and they may not provide adequate protection in the event of a serious accident. If the costs of an accident exceed these limits, you will be responsible for paying any additional expenses out of pocket. Therefore, it is highly recommended that you consider increasing your liability insurance coverage beyond the minimum requirements to ensure you are fully protected.

While Louisiana requires drivers to carry liability insurance, collision and comprehensive insurance are not mandatory. However, if you finance or lease a vehicle, the lender or leasing company will typically require both collision and comprehensive insurance to protect their investment. Collision coverage will cover your vehicle in the event of a collision with another vehicle or a fixed object (excluding animal collisions), while comprehensive coverage will protect your vehicle from non-collision perils such as weather events and theft.

In addition to the minimum liability coverage, there are several optional add-on coverages available in Louisiana, including collision, comprehensive, medical payments, uninsured motorist, and towing and labour coverage. These optional coverages can provide additional peace of mind and financial protection in the event of an accident or unforeseen event.

What are the penalties for driving without insurance?

Driving without insurance in Louisiana can result in a variety of penalties, including fines, license suspension, registration revocation, and vehicle impoundment. Here are the detailed consequences for driving without insurance in Louisiana:

Fines

For a first offence, the fine for driving without insurance in Louisiana ranges from $500 to $1,000. For a second offence, the fine increases to $250, and for subsequent offences, the fine can go up to $700. These fines can impose a significant financial burden, especially for repeat offenders.

License Suspension

If caught driving without insurance in Louisiana, your driver's license can be suspended for a period of time. The length of the suspension may vary depending on the number of offences. For a first offence, the suspension is typically 180 days. A second offence will result in another 180-day suspension.

Registration Revocation

In addition to fines and license suspension, driving without insurance in Louisiana can lead to the revocation of your vehicle registration. This means that your vehicle will no longer be legally registered with the state, and you may have to pay additional fees to get it registered again.

Vehicle Impoundment

Louisiana law also allows police officers to impound a vehicle if the driver cannot provide proof of insurance. This means that your car will be towed and held in a lot, and you will have to pay fees to get it back. The impoundment period can vary depending on the circumstances and the number of offences.

No Pay, No Play Law

Louisiana also has a unique "No Pay, No Play" law, which affects uninsured motorists involved in accidents. According to this law, an uninsured driver may be prohibited from recovering full compensation for their losses after an accident, even if they were not at fault. Specifically, an uninsured driver cannot recover the first $25,000 in property damage and the first $15,000 in personal injuries resulting from the accident. This law emphasizes the importance of maintaining adequate insurance coverage to protect yourself financially in the event of a collision.

What is the 'No Pay, No Play' law?

In Louisiana, the "No Pay, No Play" law prevents uninsured and under-insured drivers from recovering the first $15,000 of bodily injury damages and the first $25,000 of property damages. This means that, even if another driver is at fault, an uninsured driver will have to cover medical costs up to $15,000 and car damage repairs up to $25,000. This law was passed in 2011 to persuade Louisiana drivers to purchase insurance and reduce the number of uninsured drivers on the roads.

There are several exceptions to the "No Pay, No Play" law:

• The law does not apply to legally parked cars.
• The law does not apply to drivers from other states with different insurance requirements.
• The law does not apply if the other driver is convicted of driving while intoxicated, intentionally causes the accident, flees the scene, or is committing a felony at the time of the accident.
• The law does not apply to a passenger's claim unless the passenger is a co-owner of the uninsured car.
• The law does not apply if the injured person is a passenger in an uninsured car (cannot be a co-owner or have an interest in owning it).
• The law does not apply if the accident involved a motor vehicle that was not being operated.

It is important to note that the "No Pay, No Play" law only applies if the uninsured driver has little to no auto accident insurance coverage. If an uninsured driver has the minimum amount of auto accident insurance ($15,000 of bodily injury coverage and $25,000 of property damage coverage), they are exempt from the law.

What is the Diminished Value law?

In the context of auto insurance, diminished value refers to the loss in a vehicle's market value after it has been damaged in an accident and repaired. This concept is also known as "diminution in value". Even when repairs are completed to the highest standard, a car that has been in a major accident will generally have less resale value than the same make and model of car that has never been damaged. This loss in value is due to a specific, sudden, and unexpected negative occurrence, as opposed to depreciation, which is an anticipated and predictable loss in value over time.

Diminished value can occur in two ways: inherent diminished value and repair-related diminished value. Inherent diminished value assumes that proper repairs have been made and is defined as the amount by which the market value of the repaired vehicle is less than its market value before the accident. Repair-related diminished value is the loss of market value due to improper repair of the vehicle. This type of diminished value is rare.

In the US, all states and territories except Nebraska allow third-party diminished value claims to be filed with the at-fault insurance. The legal basis for these claims is rooted in tort law. Louisiana is one of the few states where diminished value is part of statutory law. Diminished value compensation is regulated in Louisiana Revised Statute 9:2800.17. This statute states that:

> Whenever a motor vehicle is damaged through the negligence of a third-party without being destroyed, and if the owner can prove by a preponderance of the evidence that, if the vehicle were repaired to its preloss condition, its fair market value would be less than its value before it was damaged, the owner of the damaged vehicle shall be entitled to recover as additional damages an amount equal to the diminution in the value of the vehicle. Notwithstanding, the total damages recovered by the owner shall not exceed the fair market value of the vehicle prior to when it was damaged, and the amount paid for the diminution of value shall be considered in determining whether a vehicle is a total loss pursuant to R.S. 32:702.

In Louisiana, drivers are allowed to recover diminished value from the at-fault party's insurance company. To file a diminished value claim in Louisiana, certain requirements must be met. Firstly, you are not entitled to compensation if you were at fault for the accident. Secondly, documentation is required to process your claim, including photos, records of repairs, and proof of the vehicle's value by a trusted source. Finally, the statute of limitations for filing a diminished value claim in Louisiana is 1 year.

What are the recommended insurance levels?

In Louisiana, drivers are required to carry a minimum amount of car insurance to be legal on the road. The minimum liability coverage requirements are:

• $15,000 for bodily injury per person
• $30,000 for bodily injury per accident
• $25,000 for property damage per accident

These requirements are often referred to as 15/30/25. While these are the minimum levels of insurance required by law, it is recommended that drivers purchase higher levels of coverage for more adequate financial protection in the event of a serious accident.

The recommended insurance levels for drivers in Louisiana are:

• $100,000 per person and $300,000 per accident in bodily injury liability coverage
• $100,000 in property damage liability coverage

These levels of coverage are often written as 100/300/100 and provide significantly more protection than the state-mandated minimums. For example, if you are found to be at fault in an accident that results in serious injuries to multiple people, the minimum coverage of $30,000 per accident for bodily injury liability may not be sufficient to cover all of the medical expenses incurred. In this case, you would be responsible for paying any additional expenses out of pocket.

By increasing your liability insurance coverage to the recommended levels, you can ensure that you have more appropriate coverage limits and better financial protection in the event of a costly accident. It is important to remember that insurance companies will typically allow you to raise your coverage limits to higher levels, providing you with enhanced financial security.

In addition to the recommended liability coverage levels, there are also optional add-on coverages that you can consider for even more comprehensive protection. These include:

• Collision coverage: This pays for damage to your vehicle in a collision, regardless of who is at fault.
• Comprehensive coverage: This covers damage caused by something other than a collision, such as theft, weather damage, or hitting an animal.
• Medical payments coverage: This helps pay for medical expenses for you and your passengers in the event of a car accident, regardless of who is at fault.
• Uninsured/underinsured motorist coverage: This protects you if you are injured by a driver who does not have insurance or does not have enough insurance to cover your medical expenses.
• Roadside assistance coverage: This provides assistance if your car breaks down, including services such as towing, flat tire changes, jump-starts, and more.

By combining the recommended liability coverage levels with optional add-on coverages, you can ensure that you have comprehensive financial protection in the event of an accident. It is always advisable to purchase as much insurance as you can comfortably afford to ensure that you are adequately protected on the road.

Frequently asked questions