Understanding Auto Insurance in Louisiana

When you are shopping for auto insurance, you will find there are several coverages available depending on your needs and your state insurance requirements.  All states require liability insurance; this covers the other driver if you are in an accident, and it was your fault.  Liability is the more expensive section of full coverage but can be purchased alone if you own your car outright.  It is important that you understand what you are paying for when purchasing car, truck, or motorcycle insurance, so we have defined the three sections of your auto insurance below.

Auto Liability Insurance (Car, Truck, Motorcycle, or SUV)?
Liability insurance covers repair costs to others when you are at fault in an accident, and it also provides for the medical needs of the innocent party. Liability can also provide coverage to property damage other than vehicles.  If you accidentally accelerated instead of hitting the brakes and ran into someone’s fence or home, liability can be applied to the damage done to the fence or house.

Liability insurance also contains legal defense in case the accident ends up in a liability lawsuit.  Covering your defense costs has a benefit to you and your insurance company.  While protecting you, the insurer also protects itself by ensuring you are not defending yourself in a lawsuit for which they are financially liable.

Understanding Auto Liability Insurance Limits
Liability insurance is available starting at a state minimum and can be increased in increments.  Limits means the most an insurer will be liable for if you are involved in an accident.  Liability insurance limits are displayed as three numbers, like this 10/50/25.   Each number represents limits in the thousands as follows:

The 10 represents $10,000 in bodily injury per person injured.
The 50 stands for $50,000 maximum bodily injury coverage per accident.
The 25 equals the maximum of $25,000 in property damage per accident.

If the accident causes damage or injuries above the liability insurance limits you choose, you can be held personally responsible and sued for the rest.   That’s why purchasing the lowest liability limits in an attempt to save money is ill-advised and can have financial implications for years to come.  

Let’s say that you are in an accident where you hit a new base-model Infinity QX80 and it is totaled in the accident.  The Infinity QX80 starts at $67,000.  The 3rd number ($25,0000) in our example above represents the most the insurance company is required to pay; you are responsible for the difference between your liability limit of $25,000 and the $67,000 it would cost to replace the vehicle.  You are now looking at covering the difference of $42,000 out of pocket.

Now, if purchased liability insurance coverage at 100/300/100, the insurance company would cover the cost of purchasing the new vehicle up to $100,000.  We recommend taking the time to speak with a knowledgeable insurance agent to discuss needs and allow them to help you determine the best coverage for your situation.  The minimum liability insurance coverage varies from state to state, for example, Louisiana Liability requirements are 15/30/25, and our neighboring state Mississippi is 25/50/25, while Texas is 30/60/25.

Need insurance in Louisiana? Call the knowledgeable agents at Kelly Lee Insurance for competitive quotes on your insurance needs.