Louisiana's Credit-Based Auto Insurance: What You Need To Know

Louisiana requires drivers to have a minimum level of auto insurance, including bodily injury liability and property damage liability coverage. The minimum liability coverage amounts are $15,000 per person and $30,000 per accident for bodily injury, and $25,000 per accident for property damage. Driving without insurance in Louisiana can result in fines, the suspension of driving privileges, and even jail time.

Louisiana's No Pay, No Play Law

Louisiana's "No Pay, No Play" law prevents uninsured and under-insured drivers from collecting 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. The law was passed in 2011 to persuade Louisiana drivers to purchase insurance and reduce the number of uninsured drivers on the state's roads.

Louisiana's "No Pay, No Play" law is unique in that it specifically enumerates "No-Pay, No-Play" deductible amounts, which are equal to the state-required minimum bodily injury and property damage liability coverages for motorists. This is in contrast to other states with similar laws, where non-economic damages such as pain and suffering, mental anguish, and loss of companionship are included in the limitations.

There are several exceptions to Louisiana's "No Pay, No Play" law:

• The law does not apply to legally parked cars.
• The law does not apply to drivers from another state if their state did not require them to have liability insurance at the time of the accident.
• The law does not apply if the other driver is convicted of driving while intoxicated, intentionally causes the accident, flees the scene, or is in the commission of a felony.
• The law does not apply to a passenger's claim unless the passenger is a co-owner of the uninsured car.

The "No Pay, No Play" law has been controversial, with opponents arguing that it punishes people who are already in a difficult financial situation and cannot afford insurance. Proponents of the law counter that it is necessary for fairness, as uninsured drivers should not be rewarded by a system they have neglected to pay into.

In addition to the "No Pay, No Play" law, Louisiana has several other requirements and laws pertaining to car insurance. Drivers in the state are required to purchase an auto policy with both bodily injury and property damage liability coverage. The minimum liability coverage amounts are $15,000 per person and $30,000 per accident for bodily injury, and $25,000 per accident for property damage. Drivers who do not meet these requirements and are involved in an accident may face fines, license suspension, registration suspension, or even jail time.

Louisiana's Diminished Value Car Insurance Law

Louisiana is a diminished value state, which means there is case law supporting your legal right to compensation when another party is at fault. The relevant statute is RS 9:2800.17, which 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 pre-loss 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.

This law ensures that a vehicle owner can recover the diminished value and the cost to repair the vehicle. It is important to note that the total damages recovered by the owner cannot exceed the fair market value of the vehicle prior to when it was damaged. Additionally, the amount paid for the diminution of value is considered in determining whether a vehicle is a total loss.

To file a diminished value claim in Louisiana, you must first prove the loss by providing evidence that the repaired vehicle is worth less than before the accident. This can be done through an appraisal by a specialist. The next step is to file the claim with the at-fault party's insurance company, and finally, negotiate a settlement. It is recommended to work with a professional auto appraiser who has expertise in these matters to increase the likelihood of a successful claim.

The statute of limitations on diminished value claims in Louisiana is one year, and the state does provide uninsured motorist coverage for diminished value. However, you cannot submit a diminished value claim if you were the at-fault party in the accident, or if the damage was caused by something other than a collision.

Driving without insurance in Louisiana

Understanding Louisiana's Insurance Requirements

Louisiana requires all registered vehicle owners to carry liability insurance. The minimum coverage includes bodily injury liability and property damage liability, with specific limits:

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

These requirements cover expenses for an at-fault accident, but additional coverage is recommended for comprehensive protection.

Penalties for Driving Without Insurance

The consequences of driving without insurance in Louisiana can be severe, even if it is your first offence. Here are the potential penalties:

• Fines ranging from $500 to $1,000
• Suspension of driving privileges and driver's license
• Revoked registration and license plate confiscation
• Vehicle impoundment and associated costs
• Inability to claim losses in collision accidents

If you are caught driving without insurance, you will be given a Temporary Vehicle Use Authorization sticker, allowing you to drive for three days so that you can obtain the necessary insurance documents. For repeat offences, the financial penalties increase, and you may have to pay reinstatement fees.

Louisiana's "No Pay, No Play" Law

One of the most significant consequences of driving without insurance in Louisiana is the state's "No Pay, No Play" law. This law states that uninsured motorists involved in an accident, regardless of fault, cannot recover damages from the other driver in most cases. Specifically:

• Uninsured drivers must pay out of pocket for the first $25,000 in property damages and the first $15,000 in personal injury costs.
• If the uninsured driver is at fault, they will be responsible for the other driver's damages without insurance assistance.

Reapplying for Auto Insurance

Driving without insurance will result in a high-risk driver designation, making it challenging to find insurance companies willing to sell you a policy. The Louisiana Automobile Insurance Plan can assist high-risk drivers in obtaining liability coverage through participating agents.

Avoiding Penalties and Staying Insured

To avoid the harsh penalties and financial risks associated with driving without insurance in Louisiana, it is crucial to maintain the minimum coverage required by the state. Compare quotes from different insurance companies to find an affordable policy that meets your needs. Additionally, consider taking advantage of discounts offered by insurance providers, such as those for safe driving, student status, or bundling policies.

In conclusion, driving without insurance in Louisiana can result in significant financial penalties, suspension of driving privileges, and challenges in obtaining future insurance coverage. It is essential to prioritize maintaining the required insurance coverage to stay safe and compliant on the road.

Louisiana's minimum liability insurance requirements

Louisiana is an at-fault state, which means that the driver who causes an accident is responsible for paying for the resulting damage. In Louisiana, every driver must carry a certain amount of car insurance to be legal. The minimum liability coverage required in the state is 15/30/25, which refers to the different types of coverage:

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

These minimum liability coverage amounts are the absolute maximum that your car insurance company will pay for a claim. This means that if you are responsible for an accident where someone is seriously injured, the $15,000 limit can be reached quickly. If multiple people are injured, the $30,000 total limit could deplete even faster. While the property damage limit of $25,000 is close to the average cost of a new car, if you damage a higher-value vehicle or multiple vehicles in an accident, you may have to pay additional costs out of pocket.

Therefore, it is recommended that you increase your liability insurance coverage to a more appropriate amount. While Louisiana's required insurance coverage is enough to keep you road-legal, it may not be enough to keep you fully protected.

In addition to the minimum liability coverage, drivers in Louisiana may also want to consider additional coverage options, such as comprehensive, collision, personal injury protection (PIP), and uninsured/underinsured motorist bodily injury (UM/UIM). These optional coverages can provide additional protection in the event of an accident, helping to pay for damages to your vehicle, medical expenses, and more.

It is important to note that the cost of car insurance in Louisiana is higher than the national average, with the state having the highest average monthly cost for auto insurance in the country. This is due to several factors, including a large number of high-risk drivers, a large percentage of uninsured drivers, and a high number of auto-related lawsuits in the state. As such, it is beneficial for drivers in Louisiana to shop around and compare quotes from multiple insurance companies to find the best rates and coverage options for their needs.

How to get the cheapest car insurance rates in Louisiana

Louisiana has some of the highest car insurance premiums in the country, with an average annual rate of $2,734. However, there are ways to get cheaper rates. Here are some tips to help you get the lowest possible car insurance rates in Louisiana:

Compare Quotes from Multiple Insurers

Shop around and compare quotes from multiple insurance companies. This is one of the best ways to find the most affordable rates for your coverage needs. Louisiana Farm Bureau, USAA, and State Farm are often mentioned as having the cheapest rates in the state.

Get Discounts

Ask about discounts that you may be eligible for, such as safe driver, low mileage, good student, multi-policy, and paperless billing discounts. Many insurance companies offer a wide range of discounts that can help lower your premium.

Maintain a Clean Driving Record

Keep your driving record clean by avoiding accidents and traffic violations. Safe drivers tend to have lower insurance premiums. If you have a recent speeding ticket or accident on your record, your rates may increase.

Bundle Policies

You can often get a discount by bundling your auto insurance with other types of insurance, such as homeowner's or renter's insurance. This is known as a multi-policy or multi-line discount.

Increase Your Deductible

Opting for a higher deductible can lower your insurance premiums. However, make sure you can afford the out-of-pocket costs if you need to file a claim.

Choose Usage-Based Insurance

Consider enrolling in a usage-based insurance program, which tracks your driving habits and adjusts your premium accordingly. These programs typically reward safe driving with lower rates.

Improve Your Credit Score

Insurance companies often use credit history to assess driver risk and determine premiums. Maintaining a good credit score can help lower your insurance rates.

Other Factors That Affect Car Insurance Rates

Several other factors can influence your car insurance rates, including your age, gender, vehicle type, mileage, and zip code. Drivers under 25 and males typically pay higher premiums. Areas with higher rates of theft, vandalism, and accidents will also have higher insurance rates.

Minimum Car Insurance Requirements in Louisiana

When choosing a car insurance policy, make sure it meets Louisiana's minimum requirements. In Louisiana, you are required to have liability coverage with the following minimum limits:

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

Keep in mind that a minimum-coverage policy may not provide enough protection in the event of a major accident. Consider purchasing additional coverage, such as comprehensive and collision insurance, to ensure you have adequate protection.

Frequently asked questions