How Louisiana’s “No-Pay, No-Play” Statute Can Affect Your Auto Accident Injury Claim and Potential Compensation
In Louisiana, the “No-Pay, No Play” law bars uninsured and underinsured drivers from collecting the first $15,000 of bodily injury damages and the first $25,000 of property damages. This means that even if the other driver is at fault, an uninsured driver will have to cover medical costs up to $15,000, and car repairs up to $25,000.
IMPORTANT – PLEASE NOTE: If you have been involved in an auto accident in Louisiana and suffered only property damage, minor injuries, or no injuries at all, and did not have car insurance at the time of the wreck, our office will be unable to help you pursue a claim unless you qualify for one of the “No-Pay, No-Play” law’s exceptions (see below).
According to the Insurance Research Council (IRC), roughly 14 percent of all motorists in the U.S. are uninsured – that’s nearly one out of every seven drivers. States with a high number of uninsured drivers also tend to have higher insurance costs. That is because accidents caused by uninsured drivers cause insurance companies to lose money. Here’s how it works:
What If the At Fault Driver Does Not Have Insurance?
Normally, the insurance company of the person who is at fault for an auto accident is responsible for paying the cost of repairs to the driver who was not at fault. If the at-fault driver does not have insurance, these costs may go unpaid. In most cases, when a person files a claim his or her insurance company pursues the other party’s carrier through a process called subrogation. But if the at-fault driver does not have insurance, the insurance company must try to collect funds directly from the driver. If this is unsuccessful – and it often is – the insurance company has to increase the premiums for its customers in order to off-set the lost money spent on claims.
Uninsured Drivers in Louisiana
Louisiana is the second most expensive state for auto insurance – partly because of its high number of uninsured drivers. In an effort to reduce insurance premiums for its consumers, among other initiatives, the state legislature passed Act 1476, known as the Omnibus Premium Reduction Act, in 1997. One section of this complex law was the “No-Pay, No-Play” provision, enacted to penalize uninsured and underinsured drivers, while encouraging them to purchase adequate levels of insurance.
Louisiana Law (La. R.S. § 32:866)
The statute reads, in part:
“[t]here shall be no recovery for the first fifteen thousand dollars of bodily injury and no recovery for the first twenty-five thousand dollars of property damage based on any cause or right of action arising out of a motor vehicle accident, for such injury or damages occasioned by an owner or operator of a motor vehicle involved in such accident who fails to own or maintain compulsory motor vehicle liability security.”
Exceptions to the Louisiana “No-Pay, No-Play” Law:
- Only the state-required minimum liability insurance, not full coverage, is required to be exempt from the “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 wreck.
- The law does not apply if the other driver is convicted of driving while intoxicated, intentionally causes the wreck, fled the scene, or was furthering the commission of 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.
Opponents of No-Pay, No-Play contend that the reason that uninsured drivers don’t have insurance is because they can’t afford it and the law simply punishes people who are already in difficult straits. However, proponents of the law believe they are necessary in the name of fairness: uninsured drivers shouldn’t be rewarded by a system they neglect to pay into, nor should they be able to benefit from law-abiding drivers’ insurance, while denying that same privilege to any drivers they themselves happen to hit.
No Pay, No Play Laws Nationally
Currently, 11 states have some version of No-pay, No-play laws on the books: Alaska, California, Indiana, Iowa, Kansas, Louisiana, Michigan, Missouri, New Jersey, North Dakota, and Oregon. Unlike Louisiana many states with No-pay, No-play limitations on car insurance claims (and lawsuits) are only on noneconomic damages. This would include items such as pain and suffering, mental anguish, and loss of companionship. Economic damages, the uninsured motorist’s actual medical bills, and property damage, are typically still recoverable in these jurisdictions. Louisiana is the only state whose law 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.
For questions about a car accident in the New Orleans area, contact the experienced team at the Law Office of Keith L. Magness, LLC today at (504) 264-5587.