With the Louisiana statutory mandated liability coverage requirement of only $15,000/$30,000, it is a forgone conclusion that Underinsured Motorists coverage should be coverage that every Louisiana motorist obtains on their vehicles. And even though UM coverage is automatically provided with limits equal to the limits of liability coverage unless expressly rejected, there are other concerns and options to be discussed. For example, any rejection of UM coverage must be on a specific form designated by the Louisiana Commissioner of Insurance. Moreover, there are certain formalities that must be followed by the insurance company such as the insured signing the form and initialing the selection of UM coverage desired or initialing the rejection of coverage, among others. Any violation of the formalities renders the form invalid and results in automatic UM coverage.
If the limits of liability coverage desired are only the required statutory minimums, the only options available are the rejection of UM coverage or the selection of Economic Only UM coverage. On the other hand, if the limits of liability coverage desired are greater than the required statutory minimums, the insured has the option of rejecting UM coverage, selecting lower limits of UM coverage or the selection of Economic Only UM coverage in limits equal to or less than the limits of liability coverage.
Economic Only UM coverage only covers damages such as medical expenses, lost wages, and other out-of-pocket expenses whereas standard UM coverage covers all damages including damages for pain and suffering resulting from any injuries sustained in any automobile accident. Considering the legislative purpose of UM coverage is to promote full recovery by innocent automobile accident victims, not only should insureds obtain standard UM coverage (not economic only coverage), but insureds should also obtain UM coverage limits equal to their liability coverage. A word of caution, be very careful when obtaining insurance coverage as often times insurance companies and/or agents seek to have unsuspecting and uninformed insureds reject UM coverage without ever alerting the insured of the potential catastrophic results of doing so, most times not even alerting the insured that UM coverage is being rejected.
For many decades I have carried on the family tradition of restoring lives throughout the local communities and throughout the state of Louisiana. At Simon Law Offices, I have proudly embraced this tradition and strive every day to continue the legacy. Simon Law Offices, Cajun Strong and restoring lives throughout Louisiana one client at a time.
Read Part 1 of The Nuts and Bolts On Uninsured/Underinsured Motorist Coverage
