Understanding Uninsured and Under-Insured Motorist (UM) Insurance Coverage in New Orleans

(Last Updated: June 27, 2024)

As a driver in New Orleans, it is critical to understand the importance of carring Uninsured and Under-Insured Motorist (UM) Insurance Coverage in the event of an auto accident.

Uninsured or under-insured (UM) motorist insurance coverage is a part of your auto insurance policy that provides insurance protection in the event you are involved in a car accident caused by a driver that either does not have insurance (or does not have adequate insurance) to cover the financial costs for your damages.

In New Orleans, uninsured motorist coverage is not required; however, we highly recommend that you retain this coverage to protect you and your family from uninsured drivers, and do not decline it in an effort to save money on your policy costs.

The Difference Between Uninsured and Underinsured Motorist Coverage

Uninsured Motorist Coverage (UM) protects you when the at-fault driver in an accident has no insurance. It covers medical expenses, lost wages, and other damages resulting from the accident. This coverage is particularly important in Louisiana due to the high rate of uninsured drivers.

Underinsured Motorist Coverage (UIM) provides protection when the at-fault driver’s insurance is insufficient to cover your damages. It pays the difference between your total damages and the at-fault driver’s coverage limit, ensuring full compensation in serious accidents where the at-fault driver has minimal insurance.

The key difference between Uninsured Motorist Coverage (UM) and Underinsured Motorist Coverage (UIM) lies in the coverage trigger: UM is activated when the at-fault driver has no insurance, while UIM is activated when the at-fault driver’s insurance is inadequate. Both types of coverage offer financial protection but address different risks. UM covers the full extent of damages up to your policy limit, whereas UIM covers remaining damages after the at-fault driver’s policy is exhausted.

In practical scenarios, UM coverage applies if you are hit by a driver with no insurance, while UIM coverage applies if you are hit by a driver with minimal coverage and your medical bills exceed their policy limit.

Legally, Louisiana requires insurers to offer UM coverage, but policyholders are not oblicated to pay for it and can reject it in writing. While UIM coverage is optional, it is highly recommended.

Uninsured and Underinsured Motorist Coverage Tips for Policyholders

Choosing the right uninsured motorist (UM) coverage amount involves assessing your risk and financial needs. Consider factors such as your medical expenses, potential lost wages, and overall financial responsibilities. A higher coverage limit provides greater protection, ensuring you are adequately compensated in case of a severe accident. It’s often recommended to match your UM coverage to your bodily injury liability limits to maintain consistent protection across different scenarios.

Selecting the appropriate uninsured motorist (UM) coverage amount is crucial for ensuring adequate financial protection. Here are some key considerations:

Assess Your Risks: Evaluate the likelihood of encountering uninsured drivers in your area. Louisiana has a high rate of uninsured drivers, making UM coverage particularly important.
Medical and Financial Needs: Consider potential medical expenses, lost wages, and long-term care costs resulting from a serious accident. Choose a coverage amount that can fully cover these expenses.
Consistency with Liability Limits: Align your UM coverage with your bodily injury liability limits. This ensures that you have consistent protection whether you’re at fault or the victim of an uninsured driver.
Consult an Insurance Professional: Seek advice from an insurance agent to understand your options and tailor your coverage to your specific needs. They can provide insights into the optimal coverage amount based on your circumstances.

By carefully assessing your risks and financial needs, and consulting with an insurance professional, you can select the right UM coverage amount to protect yourself effectively.

How an Attorney Can Assist with Uninsured Motorist Claims

An attorney can provide invaluable assistance when dealing with uninsured motorist claims. They can help navigate the complex legal and insurance landscapes, ensuring all necessary documentation is properly filed and deadlines are met. Attorneys can also negotiate with insurance companies on your behalf, leveraging their expertise to secure a fair settlement. If a dispute arises, they can represent you in court, advocating for your best interests and aiming to achieve the best possible outcome.

In summary, while selecting the right coverage and negotiating with insurance companies requires careful consideration and strategy, having an attorney can greatly enhance your chances of receiving the compensation you deserve.

An attorney can provide crucial support in managing uninsured motorist (UM) claims. Here’s how they can help:

Navigating Legal Complexities: Attorneys are well-versed in the legal intricacies of UM claims, ensuring that all necessary paperwork and procedures are correctly handled.
Negotiating with Insurance Companies: An attorney can effectively negotiate with your insurance company to secure a fair settlement, leveraging their expertise and experience.
Maximizing Compensation: They will work to ensure you receive the full amount you are entitled to, covering medical expenses, lost wages, and other damages.
Representation in Court: If a dispute arises, an attorney can represent you in court, advocating for your rights and aiming for the best possible outcome.

Engaging an attorney can significantly enhance your chances of a successful UM claim, providing expert guidance and robust representation.

How does uninsured motorist insurance coverage work in New Orleans?

Uninsured/Underinsured Motorist (UM/UIM) insurance is essential in New Orleans to protect yourself from at-fault drivers who lack adequate insurance. When you purchase UM/UIM coverage, you add an extra layer of protection that activates if you are injured by a driver without sufficient insurance.

When an accident occurs, and the at-fault driver is uninsured, your UM coverage steps in to cover medical expenses, lost wages, and other damages up to your policy limit. Similarly, if the at-fault driver is underinsured, your UIM coverage pays the difference between their policy limit and your total damages.

Key Benefits of UM/UIM Coverage:

Financial Security: Ensures you are not left with significant out-of-pocket expenses.
Peace of Mind: Provides confidence that you are protected regardless of other drivers’ insurance status.

Choosing the Right Coverage:

Assess Your Needs: Consider factors such as your health, job, and financial responsibilities.
Consult with Experts: Talk to an insurance agent or attorney to determine the appropriate coverage levels for your situation.

By understanding and investing in UM/UIM coverage, New Orleans residents can safeguard themselves against the financial impacts of accidents involving uninsured or underinsured drivers. This is of particular importance in a state that does not require drivers to carry auto insurance.

Legal Requirements and Options

Louisiana Laws Regarding Uninsured Motorist Coverage

In Louisiana, uninsured motorist (UM) coverage is a legal requirement, but policyholders have the option to reject it in writing. The state mandates that insurance companies offer UM coverage equal to the bodily injury liability limits of your policy. If you choose to reject or lower the UM coverage, you must sign a waiver. This ensures that drivers have an opportunity to protect themselves against uninsured drivers, but also allows them to opt-out if they prefer.

Comparison with Other States’ Requirements

Louisiana’s approach to UM coverage is somewhat unique compared to other states. For instance, in states like New Hampshire and Virginia, drivers are not required to carry auto insurance at all, but must prove financial responsibility or pay an uninsured motorist fee. In contrast, states like New York and North Carolina mandate UM coverage as part of the standard auto insurance policy without an opt-out option.

Key Differences:

Mandatory vs. Optional: In some states, UM coverage is automatically included, while in others, like Louisiana, it can be waived.
Coverage Limits: States differ in the minimum required limits for UM coverage.
Waiver Requirements: The process for waiving UM coverage varies, with some states requiring written consent similar to Louisiana.

Benefits of Louisiana’s System:

Flexibility: Drivers can choose their level of protection based on their financial situation.
Awareness: The mandatory offer and waiver process ensures that drivers are informed about UM coverage and its importance.

In summary, Louisiana’s laws aim to balance mandatory protection with personal choice, allowing drivers to customize their insurance according to their needs while ensuring they are aware of the risks of driving without UM coverage.

How Uninsured Motorist Insurance Policies Work in Louisiana

In New Orleans and throughout the state of Louisiana uninsured motorist (also known as UM) coverage is typically part of all auto insurance policies, unless the policyholder specifically chooses not to include it on their policy.

Often policyholders decline uninsured motorist coverage to decrease the cost of their policy premiums.

However, we strongly encourage policyholders to retain this coverage, as there are many drivers in Louisiana without auto insurance or adequate coverage. If in the unfortunate event you are injured by a driver that does is not carry insurance or enough insurance to cover your injuries, medical costs, property damage, etc… it is critical that your car insurance policy includes UM coverage. Otherwise you may end up with no insurance available to cover your damages.

Can The Insurance Company Raise My Rates or Drop Me For an Uninsured Motorist Claim?

The short answer to this question is NO! Under Louisiana law, it is illegal for an insurance company to raise your rates or drop you as a customer if you file an uninsured/underinsured motorist insurance claim.

This is one of the biggest concerns of our clients, and a question we are always asked… whether making a claim under their uninsured/underinsured motorist insurance coverage will cause the insurance company to raise their rates or drop them as a customer.

The only way an insurance company can penalize you is if you are at-fault in an accident:

Louisiana Revised Statute Title 22, Section 1284 states:

A. No insurer shall increase the rate, increase or add a surcharge, cancel, or fail to renew any policy of motor vehicle insurance when such action is based on consideration of one or more nonfault incidents.

B. In this Section, “nonfault incident” means an accident, collision, or other incident involving a vehicle covered by a policy issued by the insurer in which the driver of the insured vehicle was not at fault, regardless of whether the incident was reported to any law enforcement agency.

What if my insurance company tries to raise my rates for making an uninsured/underinsured motorist insurance claim?

The insurance company can be liable to you for a premium refund, damages, and attorney’s fees. This means that not only does your insurance company have to pay you back your premium and a penalty, they also have to pay the attorney’s fees you incur.

So should you make an uninsured/underinsured motorist insurance claim in connection with your accident? If you are injured and there is no other insurance available or the other driver did not have enough insurance, of course you can make a claim. This is exactly what you pay for when you buy insurance – to use it when you need it.

If you would like to talk further about whether you should make a claim against your insurance company following an accident and if your insurance company can raise your rates or drop you as a customer as a result, give our office a call. We would be happy to discuss your claim with you and how best we may be able to help.

Frequently Asked Questions About Uninsured Motorist Coverage in Louisiana

What is uninsured motorist coverage?

Uninsured motorist coverage is a type of car insurance that protects you if you’re involved in an accident with a driver who doesn’t have insurance.

Why is uninsured motorist coverage important in Louisiana?

It’s important because Louisiana has a high rate of uninsured drivers. This coverage ensures that you are protected financially if you get into an accident with one of them.

What does uninsured motorist coverage typically cover?

It covers medical expenses, lost wages, and damage to your vehicle caused by an uninsured driver.

Can a car insurance company raise my rates or drop for making an uninsured motorist claim?

100% NO! If you are not at-fault for the accident and you make a claim under your own insurance for uninsured/underinsured motorist insurance benefits, your insurance company cannot drop you or raise your rates, per Louisiana law.

Client Testimonial

“[After my wreck,] I was scared and nervous, anxious about [how I was going to] pay for my medical bills. [I found Keith online and called him due to] his story. [Keith and his team are] friendly and honest. [They] helped me move forward, scheduled my doctors appointments, helped me understand everything in my case, and maximized the money recovered. They called and made sure everything was okay with me and my daughter. They became family to us. Everything was good and wonderful. Thank you so much for everything.”

Elan — New Orleans, Louisiana

How to get help with your uninsured motorist claim in Louisiana

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.