How Louisiana’s No-Pay, No-Play Statute Can Affect Your Baton Rouge Auto Accident Injury Claim and Compensation
In Louisiana, the “No-Pay, No Play” law keeps 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. A Baton Rouge personal injury attorney can help you understand this law.
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, like Louisiana, 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 offset 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 that 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 for 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.