Are There Limits to Insurance Coverage After A Car Accident?

In 2021, Louisiana saw 914 car crashes on public highways, with a total of 997 fatalities. Having the right automobile coverage can help protect drivers’ vehicles and personal finances in the aftermath of a car accident. Maintaining state-required minimums of liability coverage or even more can also help ensure everyone in the accident receives the relief from medical bills and car repair bills they need as they recover from the event. While all drivers in Louisiana must have some level of coverage, that minimum isn’t always enough to cover all the bills of a car accident. Learn more about the coverage required in the Bayou State, what those coverage amounts do and don’t apply to, and what car owners can do about the limits to insurance coverage after a car accident.

Understanding Insurance Coverage Types for Car Accidents

Drivers are required to have car insurance to legally drive their vehicle in Louisiana and surrounding states. Liability coverage (the required element of insurance in Louisiana) protects other people and other people’s property in the event of a collision. When a driver causes a car collision, for example, or hits a stationary object or pedestrian, that liability coverage goes into effect. Other types of insurance you might opt into including in your car insurance policy include:

• Uninsured or underinsured motorist coverage, which covers the cost of injury to a driver and their passengers if the at-fault driver doesn’t have sufficient coverage
• Uninsured or underinsured motorist property coverage, which covers damage done to a vehicle during a collision with an uninsured or underinsured driver
• Comprehensive coverage for non-collision incidents and damage
• Collision coverage for damage done to a car in a collision, whether the driver was at fault or not
• Towing and labor coverage

The exact combination of coverage elements drivers select can vary based on the age of the car, the cost of the premiums, and the driver’s own preferences. Louisiana has some of the highest car insurance rates in the country, coming in at an average annual cost of $3,629 for full coverage or $930 for the minimum legally required coverage levels.

Liability Insurance in Car Accident Claims

Louisiana sets minimum amounts of liability insurance coverage that all drivers must maintain to drive legally in the state. The liability limit structure is a ’15/30/25′ model. This means that drivers must have:

1. $15,000 bodily injury coverage for one person
2. $30,000 bodily injury coverage for more than one person
3. $25,000 vehicle or property damage coverage

This coverage works differently in a couple of different scenarios:

• Scenario A: A driver collides with a vehicle. That other driver was injured, but there were either no other passengers or those passengers were uninjured. The injured driver’s injuries total up to $20,000 in medical costs. The at-fault driver’s insurance policy would cover $15,000 of that bill.
• Scenario B: A driver collides with a vehicle. The driver sustains $15,000 in injuries, and the front passenger has $5,000 in medical bills. In this scenario, the at-fault driver’s insurance would cover the full $20,000 by using both the (1) and (2) sections of the liability coverage policy.

This coverage is tied to the car, not the individual driver. For example, a driver’s liability insurance also applies to their spouse, dependents, and any other drivers the owner allows to drive the vehicle (unless they are specifically excluded by the policy).

Extended Auto Warranties and Their Role in Car Accident Claims

Extended car warranties don’t help cover damage to a vehicle from a car accident. Instead, warranties cover many sudden breakdowns, faulty parts, and other non-typical damage that can happen to a car. Warranties often exclude general maintenance, expected wear and tear, and damage from negligence.

However, if a car with a warranty becomes totaled during a car collision, owners may be able to get a partial refund from the warranty provider. Drivers should check the individual terms and conditions of their unique policies. While Louisiana requires extended warranty providers to be ‘Vehicle Mechanical Breakdown Insurers‘ that must register with the Louisiana Commissioner of Insurance, individual contract terms can vary widely.

Limits to Insurance Coverage After a Car Accident: What You Need to Know

Insurance policies don’t provide infinite coverage. Even comprehensive policies have coverage limits that stipulate the maximum amount of money an insurance provider will pay out in different situations. Before a car accident occurs — or as a driver is considering the potential terms of their next car insurance policy — it’s important to understand where those coverage limits run out.

Your Own Policy: How It Affects Your Car Accident Claim

Every car driver has the right to shop around and purchase a policy that meets or exceeds the legal minimum standards in Louisiana — the 15/30/25 liability coverage amounts. Beyond that, drivers can request plans that include additional liability coverage, cover damage done to their own vehicle in a variety of circumstances, and even cover towing fees or broken windshields.

However, many of the coverage areas have per-occurrence limits. That means there’s a cap on how much money an insurance company is required to pay out. More robust policies may push that number higher, but there will always be a cap. For example, in the earlier liability coverage example with a $15,000 bodily injury coverage, the insurance company will only cover up to $15,000 of medical bills. It will pay up to $15,000 in the next car crash, as well, but not more than $15,000 for each event.

Insurer’s Standard Policies: What You Need to Look Out For

Insurance companies set standard limits across their policies. There are four key types of limits that all Louisiana drivers should be aware of:

• Per-person limits: Again, under the minimum liability coverage limits, the injured party will only receive an insurance payout of $15,000 for one individual.
• Per-occurrence limits: In that same circumstance, the insurance company will only pay up to $30,000 for injuries, and only then if multiple people were injured.
• Combined limits: Insurance companies also establish a total coverage cap. No matter how many coverage types are triggered in a single incident, payment will not exceed this limit.
• Aggregate limits: Insurance companies protect themselves by establishing a total cap for a year or other time period. Once this threshold is reached, they won’t pay out for future collisions within the established time period.

If you have been involved in a car accident in New Orleans, please contact the Charbonnet Law Firm, LLC online, or call our office at (504) 294-5094.