If you’ve been injured in a car wreck that is not your fault, you will always look to the at fault driver to pay for your damages. But what happens if that driver did not have insurance? Or did not have enough insurance to fully compensate you? What if you are involved in a hit and run? If this is the case, we would turn to your own auto policy to see if you carry uninsured or underinsured motorist coverage.
While Louisiana does not require drivers to carry uninsured motorist coverage (UM), it is never a bad idea to add it to your policy. In fact, 15% of Louisiana drivers do not have auto insurance. Although drivers are required to carry minimum liability insurance, not all drivers abide by this rule, so it is always important to have an extra layer of coverage for yourself in case of an accident.
Essentially, uninsured motorist coverage provides benefits to policyholders for bodily injury or property damage caused by another driver who does not have active insurance. UM/UIM insurance covers both economic and non-economic losses you sustain due to a motor vehicle accident caused by another driver or party.
Underinsured motorist coverage provides policyholders with benefits when the at-fault driver has insurance, but their coverage isn’t adequate to compensate you for the amount of damages you suffered. For example, if you are injured in an accident and your case is worth $50,0000, but the at fault driver only had minimal limits of $15,000, you could turn to your own underinsured motorist policy to receive more compensation after that initial $15,000 is paid.
Whenever you are purchasing your auto insurance policy, you are presented with a selection rejection form. This allows you to either reject uninsured motorist coverage, or select which type of coverage you would like to add to your policy. There are several types of uninsured and underinsured motorist coverage in Louisiana:
- “Non-Economic” UM/UIM Coverage: This covers both economic and non-economic damages following a motor vehicle accident for which another party is at fault. This means you can recover compensation for financial losses and intangible losses, such as pain and suffering.
- Limited “Economic Only” UM/UIM Coverage: This type of UM/UIM insurance only covers economic losses, meaning those with a specific dollar amount attached to them. Examples of economic losses include medical bills and lost wages. This does not cover pain and suffering.
- UM/UIMProperty Damage Coverage: UM/UIM Property Damage insurance covers damages related to property damage resulting from an accident, such as vehicle repairs. Standard UM/UIM insurance typically only covers bodily injury-related damages.
- Lower Limits UM/UIM Coverage: While you cannot purchase more UM/UIM coverage than bodily injury (BI) coverage in Louisiana, you can elect to lower your UM/UIM limits, rather than match your BI coverage. This results in lower premiums, but also means you have lower limits in coverage.
Unfortunately, a number of insurance agents do not adequately explain the nature of this coverage and the consequences of rejecting it before getting policy holders to sign the rejection form. As a result, some drivers do not have uninsured/underinsured motorist coverage, and do not have an opportunity to benefit from it in the future.
This type of coverage is also often misunderstood when it comes to putting it to use. Many injured drivers do not want to use their own policy or file a claim with their own insurance. However, this is a common misconception. Under Louisiana Law, an insurance company cannot raise your premiums for using your uninsured motorist coverage. It is purchased as an extra layer of protection and has no penalties attached.
Please note that you must have uninsured/underinsured motorist coverage on your policy at the time of the accident. If you add it after your accident has happened, it cannot be used. In reality, it will only cost you a couple more bucks to your premium, so we encourage you to add uninsured/underinsured motorist coverage to your policy for your own protection in the event of an accident. If you do not currently have this coverage on your policy, contact an insurance agent today!
WGNO (ABC affiliate) Legal Analyst, Cliff Cardone, has helped clients throughout all of Louisiana with their personal injury needs for over 40 years. If you or a loved one has been injured in an auto accident, call us today for a free consultation! PHONE CARDONE at 504-522-3333, 225-706-3920 (Baton Rouge office), 1-888-892-2736 (toll free) or email us at firstname.lastname@example.org.