Traffic, and road rage, is just getting worse and worse. Is it true that insurance won't pay for accidents caused by road rage?
Road rage, or aggressive driving, has been increasing at an alarming rate, as you may know from personal experience. There have always been short tempered drivers, and the extra traffic and frayed nerves caused by Hurricanes Katrina and Rita have brought many sad reports of road rage incidents.
You have no doubt been a witness to some forms of road rage yourself, such as: following too closely, yelling, making obscene gestures at other motorists or forcing other vehicles off the road or into the path of oncoming traffic. More serious forms include brandishing firearms and even shooting into other vehicles, killing or injuring the driver or passengers.
It is true that liability insurance may not pay for damage or bodily injury involving road rage. Many insurance policies exclude intentional acts from such coverage. That fact makes it even more important for us to raise our defensive driving skills to new heights. Dealing with this new breed of hostile drivers calls not only for increased alertness, but for self control and sound judgment.
Two defenses against road rage that are simple and easy to follow are courteous driving and reporting aggressive drivers to the authorities promptly.
Think of those little things you find most irritating in other drivers and avoid being guilty of them yourself. They include: tailgating, blinding other motorists by driving with your lights on high beam, driving too slow in the fast lane, speeding up when another motorist tries to pass and cutting in too soon when you pass a car.
Try not to respond aggressively to that first hostile action on the part of the other driver and report the aggressive driver to law enforcement officials as soon as possible.
Get the license number and other identifying information on the car and driver. If you have a phone in your car, alert local law enforcement officials as soon as possible, without calling attention to yourself. If someone else is in the car with you, perhaps that person can inconspicuously place a call without being detected.
Even though it is true that road rage may not be covered by insurance, the best reason you have for avoiding it is the safety of yourself, your family and other innocent people on the road.
After all the flooding caused by Katrina and Rita, I'm thinking about buying flood insurance for my car. Can I do that, even if it is an older car?
The only insurance you are required to carry is a liability policy to cover bodily injury and property damage to other people and their property. To help you decide whether to carry flood insurance (comprehensive) coverage, let's look at the protection you would get for your money.
Comprehensive insurance covers a wide range of damages that may occur through no fault of yours, including fire, theft, malicious mischief, vandalism, glass breakage and flooding. Notice that some of those losses can be quite costly regardless of the age of the vehicle. Replacing a windshield to pass a safety inspection is a notable example. Deductibles range from zero to $250. The higher the deductible, the lower the premium. If, for example, your vehicle is stolen and wrecked, under a $250 comprehensive deductible, you pay the first $250 and the policy would pay the rest, up to the insured value of the vehicle.
Specific factors you will want to consider before making a decision about buying this comprehensive coverage are the cost of coverage and the insured value of the vehicle. Talk with the agent (producer) who has the liability insurance on that vehicle to learn how much comprehensive coverage would cost and how much the insurance company can be expected to pay if the insured vehicle is damaged or destroyed.
You will also want to take into consideration the possibility that, as a second vehicle, this one may very likely be left behind if there is a major flood event that causes you to have to evacuate quickly.
If you decide to add comprehensive to the liability policy on this or any other older vehicle, do the math periodically on the comprehensive coverage just as you would on the more expensive collision coverage. When the price is right, policyholders often keep comprehensive on a vehicle as it ages because it is relatively inexpensive.
I am moving to Louisiana from Canada. What insurance do I have to buy if I own a car and a house?
First of all, let me welcome you to Louisiana. As to your question about what insurance you have to buy, the only insurance you are required to carry by law is 10/20/10 liability coverage on your motor vehicle. That is, if you are liable for damage or injury in an auto accident, the minimum liability policy will pay up to $10,000 for bodily injury to one person, $20,000 for bodily injury to more than one person and $10,000 property damage.
In addition, you will be required, by the lender, to buy collision and comprehensive coverage if there is a lien on the car. The same thing is true of property insurance on your home. The company holding the mortgage on your house will require you to carry insurance to protect the company's investment.
Most lenders will offer to provide the required insurance coverage as a part of your loan. However, it is cheaper if you buy your own policy. You fulfill the insurance requirement simply by showing proof of insurance at the closing of the deal on the house or car.
Shop around for quotes on automobile and homeowners insurance from two or more insurance companies. Companies may be able to give you a better rate if you carry more than one policy with them.
When getting price quotes for property insurance on your home, ask about any hurricane exclusions that might apply if you live on or near the coast. Wherever you live in Louisiana, you will want to consider buying flood insurance, which must be purchased as a separate policy.
Once you have narrowed your insurance choices to one or two, call us for further information. We can tell you whether the producers (agents) and companies you are considering are licensed to do business in Louisiana, whether any complaints have been filed against them, and what each company's rating is with national insurance rating services.
Health insurance is not required, but if your employer does not provide a health care plan, you will probably want to purchase some kind of health care coverage to help with potential medical costs.
While I was buying presents for my family’s wish list,
I was robbed by a thief who apparently had my car and packages on his wish list.
I have full insurance coverage on my car and house, but I’m not sure who will
pay for what. The police didn't find the car, or the watches and camera I had bought.
It sounds as though you have adequate insurance coverage, but it is true that your
reimbursement will probably come from different sources. Let’s begin by looking
at the coverage you have on the car. Your comprehensive, or fire and theft, insurance
will pay for your unrecovered car, minus the deductible. That is, if the actual
market value of your car is $16,000, and you have a $250 deductible on your comprehensive
coverage, you will pay $250 and the insurance company will pay the rest to replace
the car. If the car is financed, remember that you need to report the loss to the
company that carries your comprehensive and collision coverage, which may not be
the one that handles your liability coverage.
When you contact your producer (agent) to report the stolen car, be sure to ask whether your policy will pay for a rental car until you can get another one. Not all policies do. If you have a road-service policy, you might also check to see if it would provide a rental car when a vehicle is stolen.
Now, let’s talk about insurance coverage on the packages. Whether the packages
were in the front of the car or the trunk, you will probably receive little or no
reimbursement for them from your car insurance. One possible source of reimbursement
for stolen items recently purchased by credit card is the credit card company.
If your purchases are not replaced by a credit card company, they should be covered
under your homeowners policy, up to the limits of the policy, but you will have
to pay the deductible. Homeowners deductibles range on average from $50 to $250.
To avoid being a victim of car theft, always lock your car, and park in well lighted,
guarded lots. Don't attract thieves with tempting packages. Store your belongings
in the trunk instead of inside the car where outsiders can see them. Even if you
take a load of packages to your car and lock them in the trunk, don't assume they
are safe. Before going back to your shopping, move your car to a different location
if possible so that a thief watching the lot will think you have left the area.
Anyone who is the victim of a car theft or break-in should contact the police right away. Also alert all insurance carriers and credit card companies that may cover some of the loss.
Do I drop comprehensive at the same time I drop the collision on my aging car? Shouldn’t I carry comprehensive longer?
We often hear that we should consider dropping collision and comprehensive insurance as our vehicles get older. You’re right about the fact that we may decide to keep comprehensive coverage longer than we do collision.
People who borrow money to buy motor vehicles generally will be required to carry collision and comprehensive coverage until the loan is paid off. At that time, they have the choice of dropping collision and comprehensive coverage or just dropping the collision.
To determine whether you should continue to carry collision, gather information about what the value of that vehicle is in today’s market, given the condition the vehicle is in. Then add up what the collision coverage will cost you for the next couple of years. Be sure to take into consideration the amount of the deductible that you are carrying. If the cost of the collision insurance, including the deductible, is quite high compared to what you would get for the car if it were totaled, you may find it isn’t worth it to you to carry the collision coverage. Figure it a second time with a higher deductible, which lowers the premium, to see if that is an option. If you decide to keep the collision coverage, reevaluate it every year or so to make sure it is still worth your while to have it.
Comprehensive coverage, which insures you for a host of perils including fire, flood, theft, glass breakage, vandalism and malicious mischief, is considerably less expensive than collision, and it covers a number of losses that may be quite costly regardless of the age of the vehicle. The amount of the deductible is a consideration here, too. Comprehensive will cost you less if you are willing to accept part of the risk by carrying a higher deductible.
Do the math periodically on the comprehensive coverage just as you did on the collision before you dropped it. People often keep comprehensive on a car for several years because it is relatively inexpensive.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My insurance producer told me I could get a discount on my car insurance if I take a driver’s ed course. Do I have to be a certain age to qualify?
Louisiana law states that insurance companies may offer a discount for driver’s education courses, and no age group is automatically excluded. In your case, your company obviously offers such a discount and your producer (agent) believes you to be eligible.
Because companies are not required to offer driver’s education discounts, policyholders who want to take such a course for a discount should contact their agent or other company representative. If such a discount is available, they should ask what restrictions the company places on the course. For example, does it have to be chosen from an approved list, or does the company evaluate courses on a case-by-case basis? Taking a driver’s ed course is probably a good idea at almost any age, especially if you haven’t had one lately. However, if your major reason for taking the course is to get the discount, be sure the course is approved before you enroll.
There are a number of driver’s education courses offered in different parts
of the state. Your church, community center or parish library should be able to
provide information on those that are held near you. The American Association of
Retired Persons (AARP) sponsors one of the best known programs. People 50 years
of age or older can enroll for a very modest fee.
We expect teenagers to take driver’s ed courses to help them drive safely despite their lack of experience, and those courses are now mandatory. We also think of senior citizens as needing driver’s training to help them compensate for slower reaction time and other physical changes that occur as we get older. The fact is that most of us could benefit from a refresher course on such things as the latest rules of the road and making the best use of safety features such as safety belts, child safety seats, air bags and antilock brakes.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I’ve heard you can buy an auto insurance policy that specifies it will not cover a certain member of the family. Is that true? If so, can I also buy a policy that won’t cover any driver but me?
Let’s start with your first question. Yes, you can buy an insurance policy that excludes a named family member from driving the vehicle, but only under very specific circumstances. An example would be a son or daughter, living in your household, who has a very bad driving record. A driver’s exclusion is an agreement between the policyholder and the insurance company stating that the individual named in the exclusion will not be covered by the insurance policy on the vehicle.
However, the kind of blanket exclusion you ask about in your second question is not allowed in the state of Louisiana. The driver exclusion is an extreme measure taken only under the most adverse of circumstances. Normally, your insurance policy contract assumes that most of the people who would have occasion to drive your car would have your express or implied permission to do so. In such instances, the other driver would almost always be covered in the event of an accident.
An example of express permission to drive your vehicle would be if a friend asks to borrow the car because his vehicle is in the shop. When you hand over the keys, you very explicitly give permission for that person to drive your car. An extreme example of implied permission would be a friend or family member driving you or someone else in the family to the hospital in an emergency.
The tough part about a driver’s exclusion is that the excluded driver would not even be covered if he or she had an accident while driving you to the hospital in an emergency situation. However, because virtually everyone else has implied permission to drive the vehicle under these circumstances, the excluded person can help by locating another driver and assuring that person that he or she would be covered while driving your vehicle because of the implied permission provision in the insurance contract.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I had an accident and now my insurance company says the finance company and I will both have to endorse the $2,000 check for the damages. Why is that necessary?
When you borrowed money from the finance company, that company was no doubt listed as lien holder, or loss payee, on your collision and comprehensive coverage on the vehicle. That means the finance company is legally protected by that policy just as you are. The same thing would be true if the lien holder was a bank or other lending institution.
You may think the two-signature endorsement is unnecessary because the amount of your damage claim is relatively small. Interestingly enough, the small claims are the ones that often lead to the most abuse (or neglect) on the part of the car owner. Here’s an example. Let’s say your vehicle’s damage was to the rear bumper and one quarter panel. The vehicle drives just like it did before the accident. In that case, many people just put off getting the repairs done, and over time, the $2,000 gets spent on something else and the damage is still there.
The problem is that the finance company knows a certain percentage of people will quit making payments on the loan and the finance company will have to repossess those vehicles to recoup its losses. If the damage has not been repaired, the company will be stuck with a damaged vehicle. For that reason, the finance company may not endorse the check until one of its representatives inspects the car to see that the repairs have been.
Sometimes, the insurance company may require that the body shop of your choice endorse the check instead. The insurance company’s payment will be based on the lowest of three estimates, but you can decide which body shop does the actual repairs. Requiring the body shop doing the work to endorse the check is just another way of making sure the insurance payment is used to make the needed repairs to the vehicle.
One final word: if you have to forward the check to the finance company for the endorsement, send it by registered mail and keep a copy.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My car jumped out of park and sideswiped both my married daughter’s car and my son’s car. Is it true that the insurance company can refuse to pay for my son’s damage because he still lives at home?
Yes, you can assume that your auto liability insurance probably will not pay for the damage to your son’s car if he lives at home. As you probably already know, if your personal car had been damaged it would not be covered under your liability policy either. However, if your daughter is married and maintains a separate household, you are liable for damage to her property just as you would be liable for damage to your neighbor’s or a stranger’s vehicle or other property.
The concept involved here is commonly referred to as a household exclusion. Your children and their property are viewed by the insurance company in terms of whether they are members of your household. The mandatory liability coverage on your vehicles protects members of your household against claims brought by people who are not part of the household. The homeowners policy on your residence and other liability coverage on members of your household, such as an umbrella policy, operate in much the same way. The household exclusion applies to your son because he, unlike your daughter, was a member of your household at the time of the mishap.
An example of how the household exclusion rule applies to your homeowners policy would be if your dog bit someone. If the dog attacks you or another member of your household, you won’t expect to file a claim with your insurance company against yourself. However, if the dog bites someone else, a claim for medical bills and more may be filed under the terms of the liability portion of your homeowners policy. If the person who is bitten does not agree with the settlement offer made by the insurance company, he or she can file suit and the matter may have to go to court to be resolved.
From time to time, the issue of household exclusions comes up for discussion in different states. However, it continues to be an established rule of law recognized throughout the United States and beyond.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My auto insurance company raised my rates after I had a couple of accidents. My producer (agent) told me I was about 55 percent at fault in both cases. I don’t think that’s fair. Is there any way I can get out of the rate hike?
It appears that your insurance company acted within Louisiana law and Department of Insurance regulations when raising your rates. Here’s why. As I explained in a previous column, Louisiana is a comparative negligence state. That means a driver can be anywhere from zero to 100 percent at fault in an accident. Generally speaking, your insurance company will assign a percentage of the fault to each vehicle in an accident and is required to have paperwork on file here at the Department of Insurance that allows for rate increases under certain circumstances.
In your case, it appears that your premium will increase by a certain amount or percentage if you have two accidents that are your fault in a certain period of time. Under Louisiana law, drivers are considered to be at fault in an accident if they are more than 50 percent to blame. On a related point, if the two parties involved in an accident are judged to be 50 percent at fault, the insurance company of each party will offer to pay 50 percent of the claim submitted by the other party.
There is one thing you may want to consider doing. You could challenge the percentage of fault assigned to you by asking the Department of Public Safety for a hearing. If DPS should decide that you were 50 percent or less at fault in either accident, the company would have to withdraw the rate increase and refund any additional premium you may have already paid.
Before asking DPS for a hearing, weigh the facts carefully. You may think your rate increase wasn’t quite fair, but it appears it is permissible under the law. You won’t accomplish anything by going to DPS unless you expect the hearing to show that you were responsible for 50 percent or less of the damage and injury in at least one of the accidents.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Why did I only get paid for 75 percent of the damage to my wrecked car? After all, the other car hit mine.
Louisiana is what is known as a comparative negligence state. That means a driver can be anywhere from zero to 100 percent at fault in an accident. For example, let’s say there were three cars involved in the accident you describe. You were in front, in Car A. Car B hit you after it was bumped by Car C. In chain reaction accidents like this, if Car B’s insurance company assumes 75 percent of the fault for damage to your car, the chances are Car C’s insurance company will assume the other 25 percent. If more cars were involved, the same principle will apply.
There are, however, other factors that can make the situation more complicated. If the insurance companies of Car B and Car C do not agree on the percentage of fault, it may be necessary for the courts to decide the matter. Or, if Car C did not have liability insurance, you would have to try and collect the other 25 percent of the damage from the individual driver or owner of the car. If you had collision insurance at the time, you have another option. You can pay the deductible and let your insurance company attempt to collect from the other companies through what is called subrogation. You could get all or part of the deductible back, depending on how successful your insurance company was in its efforts to collect the total amount of the damage.
Another example of comparative negligence could involve your being partially at fault. For example, let’s say you were backing out into a busy street or roadway when the other car hit you. The insurance company might decide to pay only 75 percent of the damage. Even though the other driver should have maintained control, the company might well determine that you were partly to blame because you did not have the right of way.
Fortunately, your situation only involves property damage. When there is bodily injury, understanding comparative negligence can be even more important to you because larger amounts of money and the welfare of injured parties may be at stake.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
When we had a lot of heavy fog the other day I was amazed at the number of people driving without their car lights on. Are there some safety tips for driving in this kind of weather?
Many drivers don’t think of dense fog in the same way they do rain or other severe weather conditions. But just as the number of accidents rise when it’s raining, the number of accidents also increases when thick fog settles into an area.
Fog occurs when the air can’t hold anymore moisture, which generally happens early in the morning or late at night. Whether you start out in the fog or you suddenly come upon a fogged-in area, the key is to slow down and turn your headlights on low beam. Do not use your bright lights. Having your headlights on low will minimize the glare off the fog. It’s also a good idea to turn on your wipers, and you may need to turn on your defroster to clear condensation from your windshield.
Remember that fog severely reduces not only your vision but everyone else’s too. You should use patience, and try not to switch lanes unless it is absolutely necessary. Another rule-of-thumb is to use the right side of the road as a guide. If you use the center lane stripe or markers as a guide, you run the risk of veering into oncoming traffic.
If you feel visibility is too poor for you to drive safely, you should try to find a place where you can get completely off the road. Try to avoid just pulling over on the shoulder. The closer you are to the traffic lane, the greater your chances of being rear-ended.
You should also be cautious if you see emergency flashers when there is poor visibility. Studies have shown that drivers are attracted to lights, such as emergency flashers, and tend to follow them, even if they are off to the side of the road. This is what’s known as the “moth effect.”
If you have to drive in bad weather conditions, remember to slow down, use your windshield wipers and keep your headlights on low beam.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My car was totaled in a wreck that wasn’t my fault. Will the other driver’s insurance company pay off my car so I can buy a new one?
When an adjuster says a car is a total loss, that means it would cost more to repair it than its market value. The adjuster will determine what the insurance company will pay, depending on the make and model of car and the general condition it was in just before the accident.
The above is true whether the adjuster is with the insurance company you have your collision insurance with or the one that has the liability coverage on the car that hit you. There are, however, two other issues that could affect the answer to your question. One has to do with whether you have liability insurance on your car, and the other with how much you owe on the car, in relation to its market value.
In the unlikely event that you did not have liability coverage on your car at the time of the accident, the “No Pay, No Play” law would apply. That is, an individual who does not have liability insurance cannot collect for the first $10,000 of damages in an accident, no matter who is at fault. However, if you had liability coverage on your vehicle, the liability insurance company of the at-fault vehicle should pay for your damage, up to the limits of the policy.
The matter of the car loan is a separate issue. Insurance policies deal with payment
of damage to a vehicle up to the limits of the policy. No consideration is given
to the amount of money you owe. Conceivably, you could have a car for a year or
more and still owe more on it than its market value. For the protection of people
who take out large or long-term loans on their vehicles, there is a separate insurance
policy available to cover that difference between what the car is worth and the
amount of the loan. It is available from lenders and, appropriately enough, is called
gap insurance.
That is, if your car is badly damaged or totaled, this additional insurance would
cover the gap between the worth of the car and the larger amount of the loan.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I have heard that the usual rules of the road do not apply
to parking lots. If so, will this affect my insurance coverage if I'm involved in
a parking lot accident?
Many parking lots, including those at shopping malls, are on private property. As
you point out, not all the “rules of the road” apply in that parking lot,
although the ones regarding insurance do.
Procedures may vary somewhat from place to place, but generally speaking, the law
enforcement agency with authority in the area where the parking lot is located will
respond when you have an accident there. The law enforcement official will write
up an accident report even though the state laws that govern public roadways do
not apply in a private parking lot. This means the officer cannot issue citations
to the drivers for moving violations such as speeding, but the officer can still
take action against a driver for not having liability insurance.
Because there are no posted speed limits or traffic lights in most parking lots,
it can be tempting to cut across marked traffic lanes or drive in the wrong direction
on a one-way traffic lane. This tendency to disobey the rules that apply in parking
lots can make driving in them deceptively dangerous. There is also the added danger
of children darting out from between parked cars.
Now, about your insurance. Here, as in any place else you operate your automobile,
all the usual rules regarding insurance do apply, and most of them are just good
common sense. If a driver is backing out of a parking space in a private lot and
hits another car that has the right of way, the first driver is at fault. However,
there are many situations in parking lots that are not as clearcut. If both you
and the other driver are backing out of parking spaces or cutting across empty parking
spaces when you collide, both may be considered at fault. Generally speaking, you
must be at least 50 percent at fault for your liability to pay. Therefore, in many
parking lot incidents, neither person’s policy will pay for damage to the other
vehicle because the drivers share the liability.
The above is still subject to the restrictions of the “no pay, no play” insurance law. Under the law, a person who does not have liability insurance on the vehicle involved in an accident cannot collect from the other driver for the first $10,000 in property damage or bodily injury, regardless of who is at fault.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
When I made my car insurance payment a few days late, the insurance company turned me in to the Office of Motor Vehicles. It cost me all kinds of money to get out of that mess. Is it legal for an insurance company to do that to a long-time customer without warning?
Your insurance company is required to report a lapse in your mandatory liability coverage on a motor vehicle registered in your name regardless of the reason for the lapse. An insurance policy is a binding contract between you and the insurance company. If you do not continue to keep up your end of the bagain by paying the premiums on time, the policy is cancelled. At that point, your company will notify Motor Vehicles that your policy has lapsed, and the vehicle will no longer be covered by that liability insurance policy.
Given that reality, we at the Department of Insurance can only advise you on what steps you can take to minimize the possibility that this will happen to you in the future. Don’t let your liability insurance premium be one of those bills that gets paid at the last minute. If you pay by mail, make sure you allow plenty of time for unforeseen delays with mail service.
In fact, you should pay the premium early enough to receive confirmation of payment
in time to place the renewal card in the vehicle’s glove compartment before
the due date. Also remember to keep the old card too, until the date the new one
goes into effect. If you make your payment at your agent’s office, don’t
wait until the last possible day to do it, and be sure you have proper proof of
payment with you when you leave the office.
If money is tight, remember that the last thing you need is to risk paying out a considerable sum in fines and penalties for letting the liability insurance on your motor vehicle lapse, even for a few days. Not only that, but you could be facing insurmountable debt if you have an accident that is your fault during the time the vehicle is uninsured. Even if you have an accident that is not your fault in that uninsured vehicle, you will not be able to collect the first $10,000 in damages because of the “no-pay, no-play” insurance law.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Cell phones in our cars have been getting a bad rap. But, don't you think we should pay more attention to other dangerous distractions as well?
The terrorist attacks of September 11 gave us many examples of how fortunate we are to have cell phones that allow us to communicate in times of need. That does not, however, lessen the need to use our cell phones safely and courteously.
Your point about paying attention to the many dangerous distractions in our vehicles is an excellent one. As the volume of traffic on our roadways increases, it becomes more and more vital that we drive responsibly and defensively at all times. One recent study shows that half of the six million crashes occurring every year in this country are caused by distracted drivers, and another estimates that up to 30 percent of fatal accidents are due to distractions.
Of course cell phones can be distracting when used while driving, and we have all
heard many theories on how to use them more safely. The following is a list of some
of the other distractions that may cause motor vehicle accidents.
*Eating and drinking - be especially aware of taking your eyes off the road to reach for a burger or bottle of water, not to mention being careful not to spill a hot beverage on yourself.
*Correcting children - if the children are fighting in the back seat, make good on your threat to stop the van and deal with them. They probably won't destroy the vehicle or each other before you can pull over.
*Grooming yourself - we've all seen women applying makeup at the wheel, and men have been observed shaving while driving.
*Playing with audio equipment - almost everyone is guilty of glancing down to change radio stations or pop in a CD or tape.
*Animated conversation - even before we had cell phones, many of us were guilty of forgetting where we were if we got into a lively conversation with passengers in the car.
We can all work toward being safer drivers by paying more attention to the road when behind the wheel.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Are Acts of God and Acts of Nature the same thing? Are they covered by insurance?
The terms Acts of God and Acts of Nature are used to describe similar kinds of occurrences that, for the most part, are beyond human control. Hurricanes, earthquakes, and floods are commonly used as examples.
Most insurance policies do not directly cover the issue of coverage of Acts of God. Instead, insurance policies, especially homeowners or other property coverage, generally list either the perils that are covered or the ones that are excluded from coverage. Acts of God are usually not treated as a group.
Property insurance coverage on your home, for example, can range from a standard fire insurance policy that only covers a few types of losses to an All Risk policy that covers all kinds of losses to the property except those that are specifically excluded. The type of insurance needed to qualify for a home loan, or the cost of the policy, often dictates which policy an individual policyholder chooses.
Flood insurance is a familiar example of a peril that you can always expect to be excluded from your homeowners policy. Insurance to cover flooding must be bought as a separate policy. Some property insurance policies also exclude wind damage while others may include the additional cost of a separate hurricane deductible. For an additional premium, coverage for these commonly excluded perils can be purchased. Note that flooding, wind damage and hurricanes may all be defined as Acts of God, but they are treated quite differently in property and casualty insurance policies.
The rules governing Acts of God on homeowners insurance also apply to renters and commercial property insurance. However, automobile insurance must be considered as a separate issue. If a vehicle is covered by comprehensive insurance, it is generally insured for most physical loss (such as fire and flood), including theft. One notable exception is that comprehensive coverage excludes collision, which must be added to the policy for an additional cost.
Your question about Acts of God is a good one because it brings to mind the number of combinations of property insurance coverage that are out there. Policyholders need to educate themselves on what is and is not covered under the specific terms of each individual policy before a loss occurs.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Next year, when I graduate from college, my parents’ auto and health insurance will no longer cover me. I was wondering if your office could suggest good insurance for me as a single person in my early 20s. Any information you could provide will be greatly appreciated.
As the regulatory agency for the insurance industry, we are not in a position to
recommend one company over another. However, we can provide help as you conduct
your search for the right insurance to buy. Here are some suggestions.
You may get some helpful hints about shopping for insurance carriers in each category
by going to our web site, www.ldi.state.la.us, clicking on “Consumers,”
then, going to the “Ask the Commissioner” columns. Beyond that,
we suggest that you shop around for insurance coverage. You may want to begin by
talking with the insurance people your parents use, but it’s a good idea to
get quotes from other agents or companies as well.
Once you have narrowed your choices down to two or three automobile insurance companies
or health care plans, contact us here at the Department of Insurance. Ask for the
A.M. Best Rating, other financial information, and the complaint history on the
insurance companies you are considering. This information can tell you a great deal
about the company’s ability to pay claims and its willingness to serve
its customers. Also ask about the complaint history on any insurance producers (agents)
who are involved. The information you receive should help you narrow your search
to one or two auto and health insurance carriers.
I hope you will be staying in Louisiana, but if you decide to move to another state, you can contact the state insurance department there for the same kind of information discussed here. Speaking of moving, consider the possibility that you may need renter’s insurance if you will be living in a place of your own.
One last word of caution. Be sure that coverage on any new policy begins on the exact date the coverage on the previous policy ends.
Good luck with your search, and let us hear from you any time we can be of help.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
When I smashed up my car recently, I was able to keep my insurance with the same insurance company, but my rates went up. How do they decide those things?
An insurance policy is a contract between you and the insurance company. You agree
to pay a certain amount of money in premiums and the company agrees to pay certain
costs if you have an accident. Each company has a plan for how much additional money
they will charge if you have one or more accidents that are your fault. The plan
may also take into account traffic violations.
In deciding whether to raise your rates or how much to raise them, the company has
to follow a set procedure. They can’t just arbitrarily choose an additional
amount of money to charge you and then charge the next person in the same circumstances
a different amount. However, the exact formula will vary greatly from company to
company.
What appears to have happened in your case is that the company reviewed your records after your accident and made the decision to charge you the allowable additional premium. Ask your producer (agent) for details about your company’s procedures. In some instances, future accidents and/or traffic violations will mean a further rise in rates, to the point that the company refuses to renew the policy. Some companies may actually move a person’s insurance to an affiliated company after only one at-fault accident. This can be a very expensive proposition involving a surcharge and significantly higher insurance premiums in the future.
Companies that advertise very low rates for drivers who have an accident-free record
may charge a great deal more if those drivers have one or more at-fault accidents.
People who are shopping for auto insurance will do well to check on what it may
cost down the road if they no longer have that perfect driving record.
None of us can be sure we won’t have an accident that is our fault, or a serious
traffic violation. However, it’s best to know ahead of time what it may cost
in insurance premiums if that happens.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Do most insurance companies hire their own adjusters, or do they use independent adjusters?
Let’s begin by defining the term “adjuster.” Generally it is used to describe an individual who is employed by an insurance company to settle claims brought by an insured or someone else who suffers losses covered by an insured’s policy.
Some insurance companies directly employ staff to handle all their claims, while others use the services of independent contractors, at least for some of their business. For example, suppose you file a collision claim with your auto insurance carrier, Company X, who employs people to handle all its claims. In that case, you may talk with someone in the claims department when you report the claim, have someone with the company come out to inspect your car and perhaps even have that same person write you a check on the spot. If the accident is more serious and personal injuries are involved, you may find yourself working with the company for a number of months until all the medical bills are settled. At every step of the process, you will be working with someone who is on staff with Company X.
Now suppose you have insurance with Company Y who uses contract adjusters. Your initial accident report may be handled by someone in the claims department of the company, but a contract adjuster will come out to inspect property damage to your vehicle. Once the inspection is done, the contract adjuster will turn in his report to the claims department of the company for final review.
By contrast, Company Z may not have adjusters on staff at all, or at least not in the particular locale where the claim is being filed. In that case, an independent adjusting firm will be hired by the company to handle the claim from beginning to end.
Independent adjusters perform a vital function by making claims services available to insurance companies when they are needed. However, whether an insurance company has a full-service claims department or uses contractors for some or all of its claims work, that company is responsible to its policyholders and to the Department of Insurance for the way each claim is handled.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I've always had a boat and jet skis but have never insured either. What can you tell me about insuring my boat and the rules and regulations for my jet skis?
In the past few years years, there has been a surge in the number of boats and personal watercrafts (commonly known as jet skis and wave runners) on Louisiana waterways. With this surge, the need for insurance protection for boaters and extra precautions on the waterways has gone up as well. As you may know, Louisiana recently passed a law raising the minimum age requirement for the operation of a personal watercraft to 16 years old.
Not surprisingly, over half of boating accidents involve collisions between two boats, and all too often, someone is hurt or even killed. If you are found liable in an accident involving your boat, you will be responsible for the property damage and bodily injury incurred by other people and property in the accident. These days, you need liability and medical coverage on the water just as surely as you do on our streets and highways.
To learn more about what kind of boat insurance is best for you, begin talking with the producer who handles your auto and homeowners insurance. If your boat is a small, noncommercial one, you may be able to obtain liability insurance on it by adding a rider to your homeowners policy. Usually, adding a rider is not an option when dealing with a personal watercraft. It is likely that a separate policy will need to be purchased to cover liability and property damage. Ask your insurance producer if he can sell you an individual policy to cover your boat or recommend someone who can.
It is important to remember that many of the rules of the water apply not only to operating a boat but also to operating a personal watercraft. Louisiana has certain requirements for operating a personal watercraft. For example, riders must wear a flotation device approved by the United States Coast Gaurd at all times, and there must be a working fire extinguisher on board. Otherwise, the owner of the watercraft may face a stiff fine. Taking a boating safety class is also recommended, but not required, for boating enthusiasts.
If you have more questions on how to obtain boat or personal watercraft insurance, please contact us here at the Department of Insurance.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I got a ticket for running a red light and hitting a truck. Do I need anything other than my regular proof of insurance when I go to court about the ticket?
No one was hurt, but it will take about $3,000 to repair the truck. Yes, you will need to take additional insurance papers with you when you go to court about the ticket.
Because you were ticketed for being at fault in the accident, Louisiana law requires that you have a Letter of Restitution from the Claims Department of your insurance company when you go before the judge. Some people think their insurance policy or a letter from their insurance producer (agent) stating they have liability insurance is all they need for their court date. However, the law requires proof that you can cover the costs of this particular accident. That means a claims representative of the insurance company must review the case and verify that the insurance company will pay the damages. A letter from your producer will not be acceptable.
To get the necessary Letter of Restitution, you will need to contact your producer or other insurance representative to complete an accident report if you have not already done so. After the report is filed, you must wait to hear from the adjuster.
If you do not have the appropriate letter when you appear in court, the judge can sentence you to 30 days in jail on a charge of contempt of court for failing to comply with the law.
If the adjuster does not contact you within a reasonable length of time, call your producer back and make it clear you must have the letter, or at least a fax copy of it, to take to court with you.
It is true that the producer and your insurance company should be aware of the law and make sure that you have the proper papers in a timely manner. However, you may have to insist on getting what you need, especially if you were a little late reporting the accident to the company.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I'm thinking of trading cars. Will my insurance be higher on the new one?
How much more you can expect to pay for insurance on your new vehicle will depend a great deal on differences between the type and model year of the new one and the one you now have.
We all have a basic understanding that a collision claim on your new vehicle will cost the insurance company more than a similar claim on a comparable model that is seven years old. We also understand that a high performance vehicle may have more exposure to risk than the typical midsize sedan. Furthermore, insurance companies have begun to go beyond the basics to match their insurance costs much more specifically to the accident record of the type of vehicle being insured.
In the area of property damage to other vehicles, for example, some major companies are beginning to charge higher or lower rates depending on the size of the insured vehicle. Medical coverage may also cost more or less, depending on whether the insured vehicle is considered safer for its occupants than others would be. Furthermore, companies do not necessarily agree on what the insurance rates should be on these various vehicles.
This means that now, more than ever, you have to ask specifically what a particular insurance company will charge for insurance on the vehicle you are thinking of buying. Talk to your present insurer and consider getting premium quotes from other insurance companies as well.
It is particularly important for you to research those prices before you discuss financing a vehicle. The dealership where you buy the car may well offer to finance the collision and comprehensive coverage as a part of the loan. Before you choose that option, be sure to weigh the relative cost and convenience of financing the premium as opposed to the cost of buying the policy independently. Also be aware that, if you do buy your own collision and comprehensive coverage as required by the loan, you must show proof of coverage at the time you close the deal on the vehicle.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I carry the required 10/20/10 liability limits on my car and my truck. Is that enough, or should I raise the limits?
Let's begin by looking at what the required 10/20/10 auto liability limits actually cover.
If you have a wreck that is your fault, your 10/20/10 will pay up to $10,000 if you are found liable for the injury or death of one person in a single accident, up to $20,000 total for the injury or death of more than one person, and up to $10,000 for property damage.
Now let's look at what that 10/20/10 insurance will pay if, for example, your car skids on a slick road, causes extensive damage to a $20,000 vehicle and seriously injures three people in the other vehicle. If the medical bills for the three people run $10,000 each, you will owe $10,000 for medical bills over and above the $20,000 for bodily injury that the insurance company will pay. On the property damage side of the equation, if the other car is totaled, the insurance policy will pay the maximum $10,000 for property damage, and you will owe the remaining $10,000.
The bottom line in this scenario is that you will be left with the total liability of $30,000 after your insurance company pays the maximum amount under your basic 10/20/10 liability limits. The cost could go much higher if the bodily injuries lead to lawsuits involving other issues, such as loss of wages for long- term disability. Even if no one is injured in an accident, the $10,000 limit on your basic insurance policy is woefully inadequate when you consider the cost of replacing most of the vehicles on the road today.
Although you hope you don't have a wreck that is your fault, these examples strongly suggest you should raise the liability limits on your auto insurance. That is especially true if you have a steady income and other financial assets, such as a home or business.
Talk to your producer (agent) or other insurance representative about the cost of higher liability limits. Check on limits of 20/40/20, 100/300/100 or more, depending on your individual situation. You may be pleasantly surprised to learn how inexpensive it can be to increase significantly your liability limits.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
l have two children taking cars to college with them next year. My 18-year-old son will be attending a Louisiana school just 100 miles from our home, and my 21-year-old daughter will be going to school in Texas. Can I still insure them as part of my household?
Let me begin by saying that all the information provided here applies equally to male and female students. In response to your specific question, you can retain your 18-year-old son's vehicle as part of your household because he is single and is a student in a Louisiana school. You will probably want to do this for at least two reasons: the cost will no doubt be less than it would be if he bought insurance elsewhere, and you will have the advantage of keeping his insurance with your company.
The insurance for your 21-year-old daughter will be going to school in Texas may be a problem, depending on your insurance company. If the company is licensed to do business in Texas and your daughter has a good driving record, she should be able to stay with that company. Her car, however, will no longer be eligible for any multi-car discount you may have on your family vehicles.
Even if your children remain with your present insurance company, each will need to pay the insurance rate that applies to the area where he or she lives and goes to school. That is particularly true of your daughter because she is going out of state.
If your daughter, or anyone else, is canceling an automobile policy with one insurance company and replacing it with another, it is important to maintain continuous coverage. That is, the effective date of the cancellation on the current policy should be the effective date of the coverage under the new policy.
For example, if your daughter isn't going to use her car for a few days while she is moving, she should not cancel the old policy and pick up with a new one a week later. The money she would save by not having insurance those few days could cost her much more in higher premiums in the long run because of the interruption in coverage.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
The subrogation clause in your automobile insurance policy allows you to give your insurance company the right to take legal action for you under certain circumstances.
Let's take a look at what that means if you decide on subrogation in this case. You file your claim under your collision and your insurance company assigns an adjuster to estimate the cost of damage just as with any other collision claim. The adjuster tells you how much the company is willing to pay for the damage, and you choose the repair shop. You pay the $250 deductible first, and the company pays the rest, up to the agreed upon amount. Ask your adjuster if your company will pay for other allowable charges, such as the cost of a replacement vehicle while yours is out of service.
So far, this is no different from any other collision claim. What is different is that under subrogation your insurance company can take legal action to seek reimbursement from the company insuring the at-fault vehicle or from the car's driver or owner. Generally speaking, if your insurance company gets its money back, you will get your $250 deductible back. However, you shouldn't count on it. Furthermore, if your insurance company is successful, it will probably take a long time.
If someone in your car had been injured, subrogation would be involved in the payment of medical bills. You could file a claim for medical coverage under your auto policy, but the amount of coverage wouldn't be enough to be of any real help. You would be better off filing a claim with your health insurance carrier. In that case, you would probably be asked to sign a subrogation agreement allowing the health care plan to seek reimbursement for its costs.
When you have an auto accident, it is always better to collect directly from the at-fault insurance company rather than make a claim against your company if that is practical. However, as your producer said, subrogation may be the best course of action in this case.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
It is, of course, better if the only people who drive an automobile are those listed as drivers on the liability insurance policy. There are, however, times when you may need to drive someone else's vehicle, such as in the situation you describe.
In the event you do have an accident while driving someone else's car, the basic rule of thumb is for the liability coverage on the vehicle to pay first. Let's look at how a settlement would be handled if you had such an accident and both you and your neighbor carried the basic 10/20/10 policy.
The basic policy pays up to $10,000 for bodily injury to one person in a single accident, up to $20,000 for bodily injury to more than one person and up to $10,000 for property damage. Let's also assume that one person in the vehicle you hit had medical bills of $15,000 and the vehicle had $12,000 worth of damage. The policy on your neighbor's car would pay the first $10,000 for the passenger's medical expenses, and your insurance company would pay the remaining $5,000. The neighbor's policy would also pay the first $10,000 on the property damage claim and your policy would pay the remaining $2,000.
If your neighbor's car were damaged in the accident, his collision would apply just as it would if he were driving the car. For example, if his car had $5,000 worth of damage and he carried a $200 deductible collision insurance policy, he would pay the first $200 and his insurance would pay the rest. If your neighbor did not have insurance on his car when you had the accident, your auto liability policy would cover you, just as it would if you were driving a rental car or other vehicle belonging to someone else.
Many accidents, such as a multi-vehicle pileup, make a settlement much more complex than the one described here. Contact your insurance company or call us here at the Department of Insurance if you have questions about how a specific claim is being handled.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
You've no doubt heard of the controversy surrounding the use of what is called "aftermarket crash parts." This term applies to non-mechanical sheet metal parts of a motor vehicle that are manufactured for replacement of damaged parts such as doors, hoods and trunk lids. The controversy stems from charges that vehicles repaired with aftermarket crash parts were unsafe and of poor quality.
Since 1991, Louisiana state law has required that insurance companies let the vehicle owner know, in writing, if aftermarket crash parts are included in the estimate of repairs for the vehicle. This is in addition to the requirement that the insured vehicle be repaired with parts of "like kind and quality" to the ones being replaced. The law specifically sets forth a clearly worded statement that must be included in the disclosure.
In 1995, when I learned that some companies were ignoring the disclosure law, I issued a directive putting all insurance companies on notice that they will be subject to severe penalties if they are not in full compliance with that law.
Here are some steps you can take to ensure that you get the best quality repair job available for your car:
1. Ask to see the itemized estimate of repairs. The written estimate
must clearly identify all items to be replaced with aftermarket crash parts.
2. Check out the manufacturer. Any aftermarket crash part is required
to bear the logo or name of the manufacturer. If you find that the manufacturer
of the parts listed on the estimate is not reputable, don't accept the estimate.
3. Talk about the timeline. Especially with late model vehicles, you may be able to negotiate for a new part rather than the aftermarket crash part if the change will significantly speed up the repairs on the vehicle.
4. Call us if you can't reach an agreement. We will work with you to ensure that your insurance company complies with the law and Department of Insurance regulations when repairing your automobile.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My car was stolen from my carport while I was on vacation. When I got home ten days later, I reported the theft to the police and the insurance company. Why did I get the feeling that I'd done something wrong?
You do not say, but I am assuming your insurance company honored your claim under the comprehensive coverage of your insurance policy. Your policy requires that you report a theft to the insurance company and to law enforcement in a timely manner, and you indicate that you did that. If you are having a problem with your claim, contact my office at the number given at the end of this column, and we will work with you and the company to resolve it.
The unspoken criticism you felt when you reported the theft may have been related to the fact that you left your home unattended for an extended period of time. Let's look at what you may want to do differently next time.
As you know, your home should look lived in while you are away. Discontinuing newspaper and mail delivery may help, but many experts say it attracts less attention if you have someone come by each day to pick up the paper and the mail. You can also leave lights on inside the house, preferably on a timer programmed to turn them on and off at intervals. It is also good to leave a radio on.
Be sure the person who is checking on your property has a number where you can be reached in an emergency. Also, alert local law enforcement to the fact that your house will be empty for several days. If you must rely solely on law enforcement to keep an eye on your home, leave the emergency number with them.
Property damage from many insurance-related losses, including fire, storm damage and break-ins, can be greatly reduced if they are detected quickly. You will rest easier on your next vacation if you have a plan for safeguarding your home and responding to emergencies while you are away.
You may also want to ask your producer (agent) about anti-theft measures that would qualify you for a discount on your home or auto insurance. Examples would be having deadbolt locks installed on the doors of your home or having the vehicle identification number etched into the windshield and windows of your car.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My spouse and I are planning on driving our car while visiting Mexico. Will our current auto insurance policy cover us?
Driving your own vehicle on vacation is a wonderful way to get around because it gives you a great amount of freedom. However, driving in Mexico can be very tricky, particularly where automobile insurance is concerned.
Mexico has its own laws, rules and regulations. Not surprisingly, auto accidents in Mexico are subject to the laws of Mexico only, not the laws of the United States.
While Mexico does not require automobile insurance, it is against the law to have an auto accident in Mexico. The Republic of Mexico considers an auto accident both a criminal offense and a civil matter. If you have an accident that causes injury to anyone, including your own passengers, the Mexican police may take you into custody and detain you until they determine who is at fault.
If you are involved in an auto collision in Mexico, you must be able to 1) prove that you have insurance recognized by the Mexican government, or 2) prove you have the financial ability to pay any judgment against you.
If you are thinking of taking out an endorsement under your U.S. insurance policy to cover you when driving south of the border, be aware that Mexican authorities will not recognize endorsements as proper insurance coverage. Endorsements will provide only limited coverage to you, your vehicle and any passengers riding with you. You must have insurance through Mexican insurance companies.
To avoid any possible problems, consider purchasing auto coverage from a licensed Mexican insurance company before entering the country. For information about obtaining Mexican insurance, ask your local insurance agent for names of authorized U.S. agents who sell Mexican automobile insurance. You can also search for agents in the local telephone directory when you reach the border.
Even if you do have a Mexican auto policy and are involved in a wreck, you won’t be able to leave the country until you or your insurance company makes amends for the damages you caused. If no one was injured in the accident, you will probably be allowed to leave within a matter of hours. However, if you injure another party, you may be detained until your insurance company has gathered all of the contact information needed from all parties involved.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I am thinking of purchasing a motorcycle. Do you have any tips on
what kind of insurance I will need?
You ask a good question about a subject that is of great interest to me. I have
been an enthusiastic motorcyclist for many years.
As you probably know, you are required by Louisiana law to have the minimum
10/20/10 liability insurance on your motorcycle, just as you must carry on any other
motor vehicle you own.
Liability insurance on a motorcycle isn't terribly expensive because statistics
show that motorcycles do relatively little damage to larger vehicles. In addition,
the majority of motorcycle accidents do not involve any other vehicle.
If you have an accident with your motorcycle that is your fault, the minimum liability
policy will provide you with liability protection for damages up to $10,000 for
bodily injury to one person, $20,000 for injury to more than one person in a single
accident, and $10,000 for property damage.
Because motorcycle accidents often do not involve another vehicle, it is particularly important that you have first party medical coverage on your policy. If you are equipped to carry a passenger, you will want to have passenger medical coverage as well. Also, be aware that the 1999 Louisiana motorcycle helmet law allows people over 18 years of age to ride without a helmet, but only if they are covered by $10,000 in medical benefits.
This coverage will pay your medical bills up to the limits specified in the policy
if you are injured in any accident, regardless of who is at fault. If your motorcycle
is financed, the lender requires you to carry collision and comprehensive coverage,
just as on any other vehicle. You will probably want to carry comprehensive coverage
even if your motorcycle is paid for.
Motorcycle insurance is considered a specialty market, so the company who carries
your other motor vehicles may not offer motorcycle coverage. Shop around before
making a final decision on where to buy your motorcycle coverage.
You may have noticed that quotes on motorcycle insurance vary greatly from one advertisement
to the next. If you are considering buying coverage from a company you are not familiar
with, don't sign on the dotted line until you call us here at the Department of
Insurance for further information on the company.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Carjackings seem to be prevalent all the time. Any tips on how
to avoid them?
We have always known there is a possibility we would be the victim of a car
theft. As you point out, we now have the added concern that our automobile could
be forcibly taken away from us, probably at gunpoint. When that happens, the theft
is known as carjacking.
Carjacking is often thought of as something that happens in major metropolitan areas,
and many times that is the case. However, this popular kind of theft can take place
anywhere there are people and automobiles. Our major defense against carjacking
is to know how these thieves operate and always to be on the lookout for them.
Carjackers may strike when your car is stopped, or a carjacking gang may set up
what is called a "bump and run" situation to cause you to stop your car.
Favorite times for carjackers to hit are when you are getting in or out of your
car or are sitting in it at a stop sign or traffic light.
In a "bump and run" situation, the targeted car is in motion when the incident begins,
and two or more thieves are involved. One carjacker will pull up behind a moving
vehicle on the roadway and bump it. When the unsuspecting driver gets out to inspect
the damage, one of the thieves forcibly takes the targeted vehicle. To help guard
against "bump and run" carjackings, experts advise drivers to use the center lane
whenever there are three lanes available on a roadway.
Carjackers most often take a car to sell it or to use it in another crime, such
as drug trafficking or robbery. However, 90 percent of carjackers carry handguns,
so the potential danger to you and your passengers is an added incentive for avoiding
situations that might lead to a carjacking.
Be especially aware of the possibility of a carjacking in the evenings, on the weekends,
and in the month of December. Parking lots, city streets, your own driveway, car
dealerships and gas stations are prime places where these thefts occur. Always be
aware of what is going on around you when you approach your vehicle, and remember
to glance in the back seat and under the car before unlocking the door.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana
Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write
Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My home and my truck were damaged this week by a storm. I don't
know yet if it was from a tornado or straight line winds. Will my homeowners insurance
pay more if the damage was caused by a tornado? What else do I need to know before
I file a claim?
We hear a lot of discussion about whether storm damage was caused by a tornado
or straight line winds. The fact is that the amount your insurance policy will pay
is not affected by whether the damage was caused by a tornado or straight line winds.
The amount paid will depend on a number of factors, including the dollar amount
of the deductible, the type of damage, and the type of property insurance policy
you purchased. Although you didn't mention flood damage, always remember that flooding
is not covered under your homeowners, renters or other traditional property insurance.
To find out what your homeowners and automobile insurance policies cover, contact
your producer (agent) or other insurance company representative as soon as possible.
It's a good ideas to have your insurance policy or policies on the damaged property
with you when you call. The policy number and other information will help your producer
or company answer questions about what your insurance covers. When filing a claim,
especially after a storm, be sure to give a phone number where you can be reached
during the day.
If you have hail or other damage to your truck and it is drivable, you may want
to meet the adjuster sometime during the day at a place close to where you work.
Of course, the adjuster will have to come to your home during daylight hours to
inspect the damage to your house and other immovable property.
Comprehensive insurance on your damaged vehicle will pay for hail and other storm
damage just as it does other covered perils. For example, if you have $250 deductible
on your car, the insurance company will pay for damages up to the value of the car,
minus the $250 deductible. Any car that is financed or leased is probably going
to have comprehensive coverage on it, although the amount of the deductible will
vary. If your liability policy doesn't include collision and comprehensive coverage,
look for a separate policy in your car loan or lease papers.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I may start using my car for business. Will my present auto
insurance policy cover me when I'm working?
Whether your personal auto insurance covers you while you are using the car for
business is very much a matter of individual circumstances. If you use a company
car, your employer will no doubt furnish the liability insurance. However, when
driving your own car while working, you will probably be expected to carry your
own insurance. Talk with your employer about whether the company will provide any
insurance coverage on your personal car while you are conducting business.
If you will not be using your car extensively for business purposes, you may not
need additional coverage. However, you may want to consider raising your liability
limits, especially if the policy you now have is for the minimum required amount
of liability. Your producer (agent) will have that information. And it is vital
that you notify your insurance company of your plans. If you have an accident, your
insurance company can deny the claim if you have not been truthful with them about
the use of the car.
If you will be using your car for business more than 50% of the time, or to transport
merchandise, talk to your producer about the possibility of buying a commercial
auto policy.
Most large employers carry commercial policies that cover employees traveling on
business. In this case, if you had an accident involving your car, you should report
the accident to both your insurance company and your employer's insurance representative.
Together the two companies will decide which policy pays first. Most employers who
furnish company cars to their employees will let you know in advance what insurance
coverage they provide and will have the necessary documentation in the glove compartment.
If you work for a company that is not headquartered in Louisiana, or if you are
renting a car, be sure to have the proof of insurance card required by Louisiana
in your glove compartment. Even though liability insurance is the owner's responsibility,
you don't want the car to be impounded while you are driving it.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
A truck backed into my car a week ago. The driver's insurance
producer told me they haven't done anything about my claim because the insured hasn't
returned their phone calls. How long can these people put me off because they haven't
heard from the insured?
Let me begin by explaining that when you file a claim after an accident, you are
actually filing the claim with the insurance company. However, when the other vehicle
is insured with a local insurance producer (agent), contacting the company's local
producer is probably the fastest way to get the claim process going.
After any accident, it is very important that you get the name and telephone number
of the other vehicle's insurance company, not just the name of the producer, before
you leave the scene. The company name and phone number should be on the Proof of
Insurance card motorists are required to carry in the vehicle. If not, it should
be on the police report. Even if you have a minor accident on private property and
the police are not called, you should still write down the name and address of the
insurance company, along with the driver's license number, address and phone number
of the other driver.
Now let's look at your specific question of how long you can be put off because
the insured has not properly reported the accident. Louisiana law requires that,
unless there is a catastrophe, the insurer must initiate loss adjustment within
14 days after that company has been notified of the loss by the claimant. Getting
the insured person's side of the story is the responsibility of the company and
cannot be used as an excuse for delaying action on your claim.
If you continue to have problems with this insurance company, call us here at the
Department of Insurance and ask to speak to someone about an auto insurance claim.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Are four wheelers and go-carts allowed on public roads? I see kids out on them all the time.
Four wheelers and go-carts are just two of several types of small, motorized vehicles,
called "all-terrain vehicles." Others include three wheelers and six wheelers. None
of these vehicles are designed for use on public roads.
There are several reasons why children and adults should refrain from operating
these vehicles on our streets and highways. This is, of course, particularly true
of children. But no matter how mature or experienced the driver is, none of the
all-terrain vehicles mentioned here are capable of performing on the road safely
under normal driving conditions, and certainly not in emergency situations.
State police accident records show that a number of Louisiana children and adults
have been seriously injured and even killed in accidents involving all-terrain vehicles
on our roadways. As a result, enforcement of laws against violators has been stepped
up in many areas of the state.Stepped-up law enforcement does not mean that officers
will simply tell a 14-year-old boy's parents that he was riding his four wheeler
on a busy highway. It means that there are a number of very serious charges that
can be brought against owners and operators (including minors) of all-terrain vehicles.
Those charges include operating a vehicle on a public roadway without a driver's
license, operating an unsafe vehicle on a public roadway, and careless operation
of a vehicle.
The parent or other supervising adult responsible for a child at the time of the
incident or automobile accident can be charged with allowing an unlicensed driver
to operate a vehicle, allowing an unsafe vehicle to be operated on a public roadway,
not having proof of liability insurance in a vehicle, contributing to the delinquency
of a minor, and criminal negligence. Criminal negligence is a felony punishable
by imprisonment at hard labor.
I commend law enforcement officials in their efforts to get all-terrain vehicles
off our highways. You can help, too, by letting adult violators of all-terrain vehicles
in your neighborhood know of the seriousness of this problem.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I'm trading my car for a motor home. How will that affect my
insurance?
Your question is a good one for anyone who is making a transition from one kind
of vehicle to another. There are some major considerations that you will want to
discuss with your insurance producer before closing the deal on a motor home.
If you take out a loan to buy your motor home, as many people do, the lending institution will require that you have collision and comprehensive coverage. As with any kind of vehicle, you should consider buying your collision and comprehensive from your liability insurance carrier. It will probably save you money, and it will give you the advantage of having your liability, collision and comprehensive in the same policy with the same company. Or, if you are at a point where you want to shop around for vehicle insurance, you can purchase full coverage from a new company. If you are trading a small, older car for your motor home, you can be sure that you will pay more in premiums. Just how much more will depend on your individual situation and will vary from company to company. That’s why it is a good idea to shop around.
When you get a quote from a company, be sure to ask whether that company offers a “multi-car” discount. You may be able to save money by insuring your other motor vehicles with the same company. You are carrying insurance on the vehicle itself just as you carry insurance on your other motor vehicles. Also, insuring your home with them may entitle you to a discount as well.
Generally speaking, if you attach some kind of awning to your house to provide a sheltered spot for your motor home you will not have to pay extra on your homeowners insurance. Always remember to let the insurer of your home know when any construction is being done in or around your home, especially if that construction can be expected to increase the value of your property or change your homeowners policy.
However, if you own another motorized item, such as a golf cart or a fishing boat,
you can insure it by adding a rider or endorsement to your homeowners policy.
My brother says he has a non-cancelable auto insurance policy.
Can you tell me where I can buy a policy that can't be cancelled?
First of all, let's look at what the term non-cancelable means when it is applied
to a personal auto insurance policy. After an individual has had auto insurance
with a company for a number of years and has established a good accident and driving
record, the company may opt to issue what is referred to as a non-cancelable policy.
What that actually means is that this person is being recognized as someone the
company would like to insure indefinitely if that person's track record continues
to be a good one.
The conditions of the non-cancelable policy must be spelled out in the policy. In
some instances, the policy may state that it will continue to be non-cancelable
with certain exceptions. Common exceptions would be if the insured got a DWI or
more than one speeding ticket within a certain time period. There may also be health
restrictions that apply.
I am not aware of any company that makes a non-cancelable policy available to policyholders
who are buying insurance with that company for the first time. However, if you have
been with a particular company for a period of years and have a good driving record,
it would certainly be worthwhile to ask your producer if you will be eligible for
such a policy at a later date.
Even if you are buying insurance from a company for the first time, it would be
a good idea to ask if you could be eligible for a non-cancelable policy at some
time in the future.
Under ordinary circumstances, after you have had an insurance policy for 60 days,
that policy can only be cancelled if you fail to pay your premium, you file a fraudulent
claim, or you or a member of your household has a driver's license or motor vehicle
registration suspended during the policy period.
If your insurance company decides not to renew your policy, you must be given a
20-day notice, and the company must give you the reason for non-renewal if you request
it in writing.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
We hear a lot about how unsafe our motor vehicles are. Is anybody really trying to make them safer?
If the 2000 model cars live up to their billing, many of them are going to be safer than earlier models have been. Some of the features being made available on most models this year are already in use on more upscale luxury cars. Others are brand new and must stand the test of actual performance on the road.
One of the most controversial automobile safety features to be introduced in recent years is the air bag. We now know that airbags can be dangerous, even fatal, for children and even small adults who are sitting too close to them when they inflate. Infants are also in danger when placed in the front seat, even when they are properly strapped into the appropriate infant's seat.
Some of the airbag safety options being offered by automobile manufacturers this year are pedals that can be adjusted so that the driver doesn't have to pull the seat up too close to the steering wheel, and sensors that prevent the air bag from deploying if a small child is sitting in it. Most popular with a broad spectrum of manufacturers is the so-called "second generation" low-impact air bag that helps reduce injury when the air bag inflates.
Rear-side impact air bags are available this year on some upscale vehicles. Others have curtain-type bags to help protect the head and neck from side-impacts. Whiplash prevention systems are also in wider use this year than before. Whiplash is a leading source of injuries in auto accidents worldwide.
Other safety features available this year on some vehicles include an emergency trunk release, a night vision system that extends the forward visibility of headlights, and a safety bumper for sports utility vehicles that lessens the damage and injury to a smaller vehicle and its passengers in a collision. Antilock brakes, once considered an expensive option, are now included as standard equipment on most models.
If you are comparison shopping for a motor vehicle, ask about safety features. They can help keep you and your family safe, and some of them may entitle you to a discount on your insurance.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My neighbor says she checks up on her insurance every now and
again, and she's trying to get me to do the same. Is this really necessary?
Yes, it is important that you look over your insurance policies once every two or
three years to make sure you really have the insurance protection you think you
are buying.
On a life insurance policy, for example, write the company for a status report periodically,
even if the policy is paid up. Sometimes life insurance companies are bought out
by other companies. When this happens, you may need to call us here at the Department
of Insurance to get a phone number for the new company. When you make contact with
the company, ask for a current status report, in writing. If the report shows that
the company will pay out less money at your death than your original company would,
ask for an explanation.
On automobile policies, look over the amount of coverage you are carrying at least
once a year. If you are carrying the minimum 10/20/10 liability limits and you've
been doing pretty well financially, you may want to increase those limits to protect
your hard-earned assets in case of a serious accident.
With homeowners insurance, keep track of what homes are selling for in your area
and adjust your homeowners insurance coverage accordingly if there is a significant
change in the prices or if you make improvements in your home that will increase
its value.
Most of us have a general idea of what our health care plan covers. But what would
your policy actually pay if you had a serious illness? A health care plan may claim
to cover a lot of different treatments, but if it also adds steep deductibles and
copayments, you may not be getting as much protection as you thought. After all,
the bottom line is the amount of money you have to pay out of your own pocket in
order to get the best medical care available.
Being well informed about your insurance coverage gives you just a little added
insurance against major financial surprises when you have a claim.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I don’t remember getting a notice that my auto insurance
was due. When I had a minor accident six weeks later, the company said I wasn’t
covered. How do I know the company actually mailed the notice?
You don’t know that the company mailed the notice. Whether the company’s
computer failed to send the notice, the post office failed to deliver it, or your
dog ate it, one fact remains: the responsibility for paying that premium on time
is yours and yours alone.
Even though you expect the insurance company to remind you that your insurance premium
is due, you have that information in advance. There are any number of systems you
can use as reminders. Just think of the system you choose as a backup, even though
you expect to hear from the insurance company. It doesn’t matter whether you
keep the payment dates on a calendar you refer to regularly, or establish a monthly
tickler file, or set up a sophisticated computer program.
What does matter is that the system you choose causes you to pay your auto insurance
premium when it comes due. If you don’t, the consequences can be very serious
and far reaching.
Consider this. What if the minor auto accident you were involved in had been a major
one? You could be looking at a debt of thousands and thousands of dollars, especially
if someone is injured. And there may be other consequences. You probably know how
complicated life can get if you can’t show proof of insurance when you are
stopped at an insurance checkpoint. But do you know your company may refuse to take
your money when you do remember to pay your premium? Many companies will only insure
people who have had continuous coverage for the past six months. The fact that you
had insurance with them until you failed to pay that last premium won’t help.
If you carry insurance on your home or other valued possessions, there is also a
whole set of serious consequences that come with letting those policies lapse, so
add their premium due dates to your list. Whatever system you use, be sure you stick
to it. And once you’ve been reminded an insurance premium is due, be sure you
get the payment to the company on time.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana
Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write
Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Doesn't Louisiana have a mandatory seatbelt law? What would
happen to me if I didn't wear my seatbelt?
Recent figures show that Louisianians are starting to buckle up more faithfully.
In the last several years, most metropolitan areas of the state saw improvement
in seatbelt compliance. We are on the right track, but we still have a long way
to go. In fact, according to the Louisiana Highway Safety Commission, Louisiana
citizens pay over $8 billion a year for injuries and related economic costs for
people who didn't wear their seatbelts.
All drivers in the state must comply with state seat belt laws for children and
adults or face being ticketed and fined. If vehicles do not have the child restraint
system that is appropriate for the children who ride in those vehicles, operators
may lose their driving privileges until the right equipment is installed.
It is vitally important that infants and small children are properly buckled into
the appropriate child safety seat for their age and that the safety seat is properly
anchored to the car. For children too big for a car seat, a lap belt or shoulder
harness is essential.
The Insurance Institute of Highway Safety ports Automobile crashes are the leading cause of There are a couple of other statistics we should also keep in mind. Before we neglect to buckle everybody up for that short run to the grocery store, we need to remember that most major accidents occur a short distance from home. Wearing your seatbelt is important, because any unbuckled traveler is at risk of being thrown from the vehicle, which is the No. 1 cause of death in auto crashes nationwide. In fact, according to the National Safety Council, inpatient hospital care costs for a crash survivor who was wearing a seatbelt are 50% less than one who was unbuckled.
Some people assume that they will have the opportunity to "brace" themselves if they are in an accident. The fact is, the force of your body at speeds of 40 or more miles per hour is too great for the arm strength of the average person. In addition, if a side or rear impact crash occurs, trying to bracing yourself would be no help.
Remember, if we increase seatbelt usage by one percent, we can save eight Louisiana
lives and have 400 fewer injuries every year. Wearing your seatbelt is an easy way
to prevent injuries if you are in an accident. So, buckle up!
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Someone told me that if another car causes me to have a wreck,
I can’t collect a dime unless the two vehicles actually hit each other. Is
that true?
It is often much easier to decide who is at fault if two vehicles actually collide.
However, the key questions are: “whose fault is it?” and “can you
prove it?” You can collect under the other vehicle’s liability insurance
coverage if you have reasonable proof that the other party was at fault.
If the vehicles do not make contact, you will still need to gather all the information
from the other driver as you would after any wreck. If the driver doesn’t stop,
try to get the license number and other identifying information on the other vehicle.
In addition, gather information from other witnesses, such as people in other cars
or in nearby homes or business places.
Even if the other driver leaves the scene, call the police. If your car is not blocking
a main thoroughfare, leave it just where it stopped after the accident until the
law enforcement officer arrives, just as you would if there had been a collision.
This will make it easier for the officer to give an accurate account of the accident
on the police report.
If you have collision insurance, you can turn a claim in to your insurance company,
pay the deductible and have the damage covered by your company. Your company can
pursue the case with the other company through what is called subrogation. If your
company is successful in collecting from the at-fault vehicle’s insurance,
you may be reimbursed for all or part of your deductible. If someone in your car
is injured, you can file a claim under your medical coverage too, for an amount
not to exceed the amount of medical coverage you carry for passengers in your car.
When your windshield or another part of your vehicle is hit by a rock or other object
thrown from another vehicle, much the same philosophy applies. You can file a claim
for damages with the owner of the vehicle. Again, you need reasonable proof and
any identifying information you can get on the other vehicle, especially the license
plate number.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I have heard that the insurance may go up on my sports
utility vehicle. Is that true?
A recently published study found that sports utility vehicles and pick-up trucks
cause more damage in accidents than smaller, lighter private passenger automobiles
do. However, the insurance rates on Louisiana sports utility vehicles are not going
to go up suddenly because one study was done.
To begin with, insurance rates cannot be changed unless the insurance company comes
to the Louisiana Insurance Rating Commission to request permission to change those
rates. To get the change approved, the company must prove that the reasons for raising,
or lowering, the rate is justified.
I always urge people to check on the cost of the insurance on the vehicle they have
chosen before they buy because insurance costs often vary, depending on the type
of vehicle and the special equipment that may be on it.
In this case, the point is that companies cannot arbitrarily raise the rates on
a certain type of vehicle without warning. They must have a sound basis for the
increase. If your sports utility vehicle’s insurance rate is the same now as
it is for a standard private passenger vehicle, that won’t change until the
company has received the proper approval for an increase.
Even if your insurance company did take notice of this much publicized study, you
don’t need to be concerned about getting a rate increase based solely on its
findings. Further research is needed to explore important factors other than damage
done in a given accident. One such factor is frequency of accidents. If further
studies show that sports utility vehicles and pick-ups are involved in accidents
less often than other vehicles are, that would offset the fact that they cause more
damage when a crash does occur.
Another factor is the shift in the type of people who drive these vehicles. At one
time, sports utility vehicles and pick-ups were most popular with young single males.
Now young mothers and fathers buy them for the added protection and safety they
provide growing families. This particular study may not have fully considered the
cost factors associated with that shift in types of drivers.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
A claim has been filed against my insurance company for $15,000
because a person got hurt when I hit his car. My automobile insurance policy only
covers $10,000 for bodily injury to one person. Can the company settle for more
than $10,000 and make me pay the difference?
Under Louisiana law, you are the person liable for all damages that are your fault.
You have a contract of insurance which obligates the insurance company to protect
you for the amount listed on the policy. Many people carry more than the basic liability
limits because they do not want to risk losing their home and other assets if they
have a serious accident that is their fault.
However, to answer your question, your insurance company cannot obligate you to
pay money out of your pocket. They can offer to settle with the claimant for an
amount up to the limit of the policy, which in this case is the basic $10,000 for
bodily injury to one person. The company will only make an offer to settle when
the accident is your fault. If a company pays the full amount covered by your policy
limits, they have no further financial obligation. But they will feel an obligation
to try to help you because you are the person insured with them.
To assist you, the insurance company will probably attempt to get the claimant to
settle for $10,000 and to sign a release saying no further claim will be made against
you or the company. However, this is not always possible, especially if the cost
of the person's medical bills is a lot more than the dollar amount of the policy.
A release agreement can be worded to release the insurance company only, but the
company will probably ask for your permission before accepting a release that does
not get you off the financial hook.
Because your insurance company is not liable for anything more than the $10,000
named in the policy, they cannot pay any more to this claimant for this accident.
For that reason, your insurance company will probably advise you to get an attorney
unless the claimant agrees to settle for the $10,000.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My twins are turning 16 in a few months. Do you have any information on auto insurance coverage for teenagers in Louisiana?
We have just published a new brochure called Teenager’s Guide to Auto Insurance. It answers many of the questions that teens and their parents have about insurance coverage.
This free insurance guide will help new drivers understand what auto insurance is and how it affects them. For example:
What happens if I get caught driving without insurance? If a teenager is caught driving without insurance, the car may be impounded.
Will my parents’ insurance cover me? Yes, a parent can add a new driver to the family car policy. However, when teens have cars of their own, they must be listed as primary drivers.
What happens if I let my friend drive my car and he has an accident? If your teenager lets a friend drive your car without your permission, your insurance company may not pay if there is an accident.
The guide also offers suggestions on how you and your teenagers can save money on your auto insurance. For instance, if students have a "B" grade point average, most Louisiana insurance companies will give a discount on their insurance. Taking a Driver’s Education course can also lower a teen’s insurance costs. In addition, you may get a multiple car discount when your teenagers have their own vehicles. Check with your agent for details.
An excellent way to save money on your auto insurance is to avoid having accidents. If your teenager is at fault in an accident, your insurance company has the right to raise your auto insurance rates or, under certain circumstances, even cancel your policy.
For your free copy, just call the toll-free number listed below and ask for the Teenager’s Guide to Auto Insurance. For information about receiving multiple copies of the guide for classroom use, ask to speak to someone in Public Affairs.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Is it safe to buy insurance over the Internet?
The Internet is a great way to find information on just about any subject, including insurance. One of the most fascinating aspects of the Internet is that it is always open for business. You can use it 24 hours a day to find an insurance agent or company in your area, evaluate your insurance needs, compare insurance rates and even apply for insurance.
When using the Internet to shop for insurance, you should follow the same steps you take when shopping for insurance the traditional way. Take time to evaluate your needs, gather several quotes and buy only the coverage you need, based on your research. There are, however, some specific things to consider when looking for insurance online.
Since virtually anyone can put information on the Internet, it is crucial that you know who you are dealing with when transacting business online. In one case, a dishonest person set up a phony web site by using an official insurance company logo. A consumer, thinking he was dealing with a legitimate producer, filled out the online application, and included his credit card number. He later learned that the insurance company never received his application or his payment.
You should also be careful in giving out personal information over the Internet. Look for the company’s online privacy policy on its web site. If a policy is not posted, contact the company directly, and ask about it. If the company does not have a policy or its representative is reluctant to talk with you about it, think twice before doing business with that company.
While the Internet provides access to information, products and services you need, it may also allow a company to collect personal information about you. Oftentimes the information collected by one company is shared with other companies without your knowledge. If you are concerned about privacy, let the company know you do not want your personal information disclosed.
Before you buy insurance on the Internet, give us a call. We can let you know if the agent or company you are about to do business with is licensed to sell insurance in Louisiana. We can also let you know if any complaints have been filed against an agent or a company.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I was in a car accident a while back but haven’t contacted the insurance company yet. How long do I have to file a claim?
Generally speaking it is best to file a claim with the appropriate party at the earliest opportunity, or as soon as possible after an accident. This will help you get the best possible cooperation from the insurance company regardless of the kind of claim involved.
Claims generally fall into two basic categories: Those you file when someone else is liable and those you file under your own insurance policy.
It is always to your advantage to see a doctor right away if you get hurt and may need to file an insurance claim, for two reasons. The first, and most important, is to safeguard your health. Injuries suffered in an accident are not always apparent to the individual at the time. The second reason for seeing the doctor is to establish a record of the injury. Having the date, time and circumstances of the injury in the medical record can be extremely helpful if you learn later that you were seriously injured and will need extensive medical treatment.
Even if you file a liability claim against someone else’s insurer, you still have just one year from the date of the accident to file a lawsuit against the person who caused the accident and his or her insurance carrier. Be aware that there may be a one-year time limit on filing a lawsuit, even if your treatment is ongoing or your claim is not completely settled. Ask a representative of the insurance company the claim is filed with about a time limit. They are required to let you, as the claimant, know if the "statute of limitations" applies.
You should have a much longer period of time to file a claim with your own insurer. For example, you may have up to 10 years before your insurance company is no longer responsible when your auto collision, homeowners, health care, and life insurance policies are involved. In one case in another state, a court ruling upheld a property damage claim for storm damage to a building even though the hidden damage was not discovered for seven years.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My oldest son got his driver's license at age 15. Now my 14-year-old is complaining because he says the new driver's license laws are not fair. Can you help me explain to him why the changes were made.
I know most teens are not impressed with statistics, but recent national figures rank Louisiana fourth in the number of teenage driving fatalities. Additionally, one in every four teenage drivers in Louisiana is involved in an accident.
There are two factors in particular that work against young drivers: inexperience and immaturity. Beginning drivers need time to learn that there is more to responsible driving than mastering the skills. It takes the maturity that can only come with time.
If your son plays sports or has a hobby, ask him if he is better at what he does this year than he was last year. He will probably agree that he is better now because he is older and has put in the time to develop his skills. The same holds true for driving. The more practice he has driving, the better he will be when he is on his own behind the wheel of a car.
With graduated driver licensing, new drivers go through a three-stage process that involves their progressive introduction to full driving privileges. By restricting when teenagers may drive, and who may accompany them, new drivers gain the much needed on-the-road experience in controlled, reduced-risk settings. It also means that your son will be older and more mature when he gains a full, unrestricted driver’s license.
The first stage of the system begins at the age of 15 when your son can get a learner’s permit. To receive a learner’s permit, he will have to pass a written test and an eye test and show proof that he has completed a driver’s education course.
At stage two, when your son turns 16, he can be issued an intermediate license. For him to receive an intermediate license he must pass an on-road-driving test.
Also at the intermediate stage, your son can drive alone except during curfew periods, when a licensed parent, guardian or adult at least 21 year of age must accompany him.
The third and final stage is the permanent Class "E" license which is issued at the age of 17.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Would you explain the different parts of a basic automobile insurance policy?
There are essentially six parts to an automobile insurance policy. Your individual policy may include from two to all six of these parts.
The first two parts concern bodily injury and property damage liability. Bodily injury liability coverage protects you in the event you cause injury to another individual while driving. If you cause damage to someone’s property, it is covered under the property damage liability portion of the insurance policy. In Louisiana, each vehicle is required to have 10/20/10 liability limits. That is, $10,000 for bodily injury to one person, $20,000 for bodily injury to more than one person, and $10,000 coverage for damage to someone else's vehicle or other property.
There are exclusions to liability coverage that you should be aware of such as intentionally inflicting bodily injury. Read your policy and talk with your producer if you have questions about any liability exclusions in your policy.
A third part of an automobile insurance policy is the medical payments or Personal Injury Protection (PIP). PIP will cover treatment of injuries to the driver and passengers of the policyholder’s vehicle.
Physical damage to your vehicle, known as Collision and Comprehensive, is covered by the fourth and fifth parts of a policy. Collision coverage will protect your car if it is damaged from some type of crash, whether with another vehicle, a light post or some other object.
Comprehensive coverage, on the other hand, covers accidental damage to your car that does not involve a collision, such as fire, theft, falling objects and flooding. Generally, both collision and comprehensive are required if you finance your vehicle.
Exclusions from comprehensive insurance coverage include damage to tape players and additional sound system equipment, antennas, or other custom accessories. Again, check with your agent to make sure you are aware of all exclusions to your policy.
Uninsured motorist coverage is the sixth part to car insurance. It is hard to believe, but some people continue to drive without insurance despite the fact that liability insurance is mandatory, and an uninsured vehicle can be impounded on the spot by any Louisiana law enforcement officer. Generally speaking, uninsured motorist (UM) coverage will pay the amount that you could have collected had the uninsured driver carried liability insurance.
While the above-named coverages are the essential elements of an autombile insurance policy, many policies also provide additional coverage for Rental Reimbursement and Towing and Labor. Ask your producer for details.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
What will my insurance cost if I lease a car, and what proof of insurance do I have to show if I'm stopped in a leased car?
I'll answer your last question first. No matter whether you own or lease a vehicle, the liability insurance identification card must be in the car at all times.
As for your second question, insurance rates are the same, for the same coverage, whether you buy or lease. However, there are some related costs you should be aware of before leasing a car.
For instance, the liability insurance limits required by lease agreements are often much higher than those required by law. Louisiana liability insurance limits are 10/20/10 which covers $10,000 for injuries or death to one person in an accident, $20,000 for injuries or death for all persons, and $10,000 for property damage.
Most automobile lease agreements require that you carry liability limits of at least 100/300/50. This difference can result in additional insurance costs of hundreds, perhaps even thousands, of dollars per year, especially for a young person with a poor driving record.
Other costs may be involved if you total the leased vehicle. Many lease agreements specify a payout cost much higher than the amount your insurance company will pay. It may specify that you must return the car, in good condition, to the lessor on a given date or pay a specific amount of money, plus an additional amount for their loss of the vehicle until it is replaced.
For example, if you total a leased car that your insurance company will replace at a value of $15,000 and the lease agreement specifies a value of $17,000, you would have to pay the $2,000 difference. Call your insurance producer to find out the insured value of the vehicle and compare that to the amount listed in the lease. Also ask whether your auto insurance company can provide the insurance required under the lease agreement.
Some leases are automatically terminated if you total the car. In that case, another cost would be the amount you would owe from the time the car is wrecked until the lessor can start leasing the car that replaces it. If the agreement specified that you owe $200 for every week it is out of service, even if it’s only two weeks, you would be paying $400 for this extra fee.
Only you can decide whether you should lease a car. Just be sure you have all the facts before signing on the dotted line.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My car quit. It’s going to cost a lot of money to fix it, and on top of that, the insurance is due. I can’t afford to pay both my premium and the repair bill. What are my options?
As long as the car is registered in your name, you are responsible for making sure the liability insurance is current on it. However, if the car is not going to be in use, for whatever reason, there are provisions in the insurance law to protect you from being hit with stiff penalties or even impoundment for having an uninsured vehicle. Let’s look at some examples.
If your vehicle has broken down and you are not going to have it repaired, turn in the license plate to the Office of Motor Vehicles as soon as possible. Whether you plan to sell the car, donate it to charity or send it to the junkyard, you are still responsible for it unless you personally see that it is no longer registered in your name. Turning in your vehicle license plate is one sure way to free yourself from this liability.
On the other hand, if you decide to have your car repaired, there are two options available to you. One is to turn in your license plate to the Office of Motor Vehicles, which means you will have to buy a new license plate when you are ready to drive your car again.
Your other option is to file a sworn statement with your local Office of Motor Vehicles stating that you will not be driving your car for a certain amount of time. This is known as an affidavit of non-use. You are eligible to file the affidavit if the car is registered in your name and the insurance on your car has not expired. The statement must include the vehicle identification number as well as the beginning and the estimated ending date of non-use. The statement must also be notarized and filed with the Office of Motor Vehicles while you have liability insurance in effect on the car.
Once your car has been repaired, you must renew the insurance on the vehicle and provide Office of Motor Vehicles with proof of that insurance before driving it.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I recently got in a wreck and have to buy a new car. If I’m stopped on the way home from the dealership, what do I show as proof of insurance?
By now, you no doubt know that your car can be impounded on the spot if you do not have proof of liability insurance coverage in the car. Even if your car is brand new, you still must provide proof of insurance on the vehicle.
If you are buying a replacement or additional vehicle, you undoubtedly have an existing insurance policy. Check with your agent to see what provisions are in your policy. In many cases you will be able to extend coverage on your new vehicle under your current policy for 30 days. During the 30 day period, you should secure a separate policy for your new car, or add the new car to your existing policy.
If you extend coverage under an existing policy, then your current proof of insurance card should be adequate proof of insurance for your new car as well. This is another good reason for keeping a copy of your proof of insurance card in your wallet just as you do your driver’s license. If you forget to take your insurance card out of your old car before leaving the dealership, you would have a copy of your insurance card with you in your new vehicle.
It is also a good idea to call your insurance producer’s office from the dealership and request a statement saying that your new vehicle is covered by your existing policy. This would serve as additional proof that your new car is insured.
Another option to look into is getting coverage bound on the car you are planning to buy. A binder is a contract issued temporarily to place insurance in force before an actual policy is issued. Be aware, though, that binding coverage is just temporary coverage and is only good until your official policy is issued. This means that you would need to make sure you received the new policy and proof of insurance card.
Remember that it is your responsibility to make sure all cars and/or trucks registered in your name have mandatory liability insurance and that there is proper proof of insurance in all of your vehicles.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
A friend of mine said she and her husband are taking out an umbrella policy since her kids are now teenagers. My kids will be teenagers soon, so should I consider an umbrella policy also? I thought umbrella policies were just for people with a lot of money.
An umbrella policy, also called an excess liability policy, is designed to protect you if you are held personally responsible to another person for injury or property damage. In other words, an umbrella policy will cover you if you are sued and have to pay more than the coverage limits under your homeowner’s or auto policies.
As parents of teenagers, you may want to seriously consider an umbrella policy. Parents of any aged children can be at risk because of their child’s actions. If your son or daughter seriously injures someone or causes them to be injured, you may be held responsible and have to pay for damages.
Let’s look at a familiar scene. Your teenaged son is driving several of his friends around town. Unfortunately, there is a wreck and several of the boys are injured. Because your son was driving, you, as a parent, might be held responsible and have to pay out thousands of dollars. If your liability limits on your auto policy weren’t enough to cover what you are required to pay, the difference would have to come out of your pocket. But if you had an umbrella policy, the policy would cover the balance of what is due.
An umbrella policy can also protect you if someone is injured in your home or on your property. Say, for example, you have a party and someone falls and gets hurt. If they successfully sue you, your umbrella policy can provide the extra coverage to pay any damages that aren’t covered by your homeowner’s policy.
The thought of not having enough insurance coverage is sobering when you think about how many lawsuits are filed these days. Umbrella liability coverage provides peace of mind for relatively little cost.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
If somebody with out-of-state insurance hits my car, where do
I file a claim?
With any auto accident, you begin by calling the police. If no one is seriously
injured, while you are waiting for the police is a good time to exchange information
with the other driver. Be sure to get the driver’s name, address and telephone
number, and the name and phone number of the owner of the vehicle if that is someone
else. Also try to get full information on the company which insures the other vehicle.
That includes name, address, and phone number of the company and the policy number
on the vehicle.
Even if you have to call an out-of-state number to contact the company, you probably
will be assigned a local insurance adjuster to process the claim. If you and the
adjuster reach an agreement on the amount of the settlement, you will sign a release
and receive a check.
The release you will sign is a legally binding document stating that, in return
for the amount you are about to receive, you agree not to make any further claim
against the company for the property damage or injury.
Examine the check closely before you sign the release to make sure it is made out
to you and that it is for the right amount. In rare cases, you may be asked to sign
the release before you get the check. If the release clearly states that it is not
effective until you get the check, it may be all right to go ahead and sign. However,
I would never advise anyone to sign a release from liability on somebody’s
promise that the check will be mailed to you later.
If the adjuster or other company representative working with you keeps hassling
you to sign a release before you get your money, you may need to talk with a lawyer.
The same principle would apply if you had another kind of liability claim such as
being injured by a falling object while shopping.
If you have trouble contacting the insurance company, call us here at the Department
of Insurance. We have information on insurance companies licensed to operate anywhere
in the country.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Will auto liability insurance pay if the driver is doing something
wrong when the damage or injury occurs?
Generally speaking the purpose of auto liability insurance is to pay if the owner
or other authorized driver of the vehicle is found legally liable for an unintentional
act which results in damage to property or injury to one or more individuals.
Let's look at some examples of situations in which liability insurance will not
pay, such as a driver's deliberately hitting a person with a car.
In that case, the insurance company carrying the driver's auto insurance will not
be legally liable because the driver intended to hit that person. The insurance
company will not be involved at all, and it will be up to the courts to decide the
extent of the driver's liability.
A related example would be someone's stealing a car and wrecking it. Neither the
insurance company nor the owner of the car is legally liable when the car is being
operated by an unauthorized driver committing a criminal act.
Be aware that the examples discussed thus far have been about liability insurance
only. Other auto insurance coverage, such as collision, comprehensive and medical,
have a different purpose and pay under different circumstances.
For example, if an insured car is damaged while being driven by an unauthorized
person, such as a robber, that damage normally would be covered by any applicable
collision or comprehensive insurance. This would be the case if the driver of a
car is forced to drive the robber somewhere and is injured in a collision that occurs
during that time. Any medical coverage on the car also will cover that insured person
just as it will in any other accident.
There is one notable exception to the rule. If the insured has signed an exclusion
stating that some member of the household will not drive the car and the excluded
person damages the car while driving it, there will be NO insurance coverage.
These are just a few examples of unusual traffic situations we all hope we will
never experience. As always, check with your agent or with us here at the Department
of Insurance if you have questions about insurance coverage in a particular situation.
Anyone with insurance-related questions or concerns is invited to contact the
Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge
or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I’m a young person just starting out. Any ideas on how
I can get good insurance but be able to pay my premiums on an installment plan?
Some insurance companies or producers offer a monthly plan for premium payment.
For example, one major insurance company will provide this service for a billing
fee of $5.00 per month, or $60 a year. With a major carrier, such an agreement should
be valid, but you still need to read the fine print to be sure you know what you
are signing and how much it is going to cost you.
You can also get premium financing through your agent, but that is a much different
arrangement, called a premium finance agreement. In that case, the money for the
premium is being provided by a company that is separate from your insurance producer.
Any time you enter into a premium finance agreement, payments should be made directly
to the company whose name is on the contract. Do not give the money to your producer,
because some people just can't resist the temptation to set up monthly payments,
take the customer’s hard earned cash, issue a bogus proof of insurance card
and pocket the money. When the person making the payments has a wreck or a house
fire and finds out the premium payments never got out of the producer's office,
it’s too late to do anything about the loss. You can avoid this situation by
choosing your agent carefully and then taking your time in looking over all premium
finance or insurance contracts before you sign them.
What often gives a dishonest “producer” away is the shoddy paperwork.
For example, if the proof of insurance the producer gives you looks like it has
been retyped, or if it just doesn’t look professionally done, call us at the
Department of Insurance. You should also be suspicious if you don’t get your
policy within a reasonable length of time and the agent keeps making excuses about
why you haven’t received it.
Just in the past few months, we have shut down two insurance agencies because people
called us to say something was wrong with their service. By all means, ask your
producer about premium financing but be careful what you agree to, and call us if
you have any questions about the producer or the finance contract.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My fiance and I are getting married soon. She is 22 years
old and I am 23. Do we need to notify our auto insurance companies as soon as we
marry, or should we just wait until it’s time to pay our premiums?
Anytime you have a major change in living and driving situations, you should notify
your insurance producer right away. This is important to you and the insurance company
from a legal standpoint. It will also give you the opportunity to explore the different
options that your change in marital status may bring.
From the legal perspective, both of these insurance companies are assuming an additional
liability because of your marriage. When you notify your respective companies of
the marriage, they will need the spouse’s name, driver’s license number,
accident record and name of the company with the insurance on the spouse’s
vehicle.
Your producer can tell you just how much money you will save when you marry. Your
fiance will no doubt see a reduction in her auto insurance, too, but the savings
probably will be less than yours.
You can both anticipate a considerable reduction in premiums unless there are extenuating
circumstances, such as a bad driving record. One possible drawback to getting married
is that each spouse brings to the union his or her driving record. If it is a good
one, both policies should cost much less than they do now. However, if either of
you has a bad driving record, especially for the last three years, it will probably
mean the price of insurance on both cars will be more than it would be otherwise.
A bad driving record might include moving vehicle violations such as speeding, automobile
accidents that were the fault of the insured, and citations for driving while intoxicated.
Before your auto insurance comes due again, each of you should check with your insurance
company to learn what your policy will cost when it is renewed. Also ask what each
company would charge if you insured both cars with that company. Many will give
a discount for a second car.
If you have property insurance, such as a renters or homeowners policy on your residence,
you may also save if you buy that coverage from the company carrying your auto insurance
policies.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
When a teenager gets a driver’s license and the parents
are divorced, who carries automobile insurance on the teenager? Please answer for
a case in which both households have two adult drivers and two licensed vehicles.
As an example, let’s look at what might be considered a typical situation,
in which one of the parents has been named by the courts as the legal domiciliary
parent. Let’s also assume the teenager spends the majority of time in that
parent’s household. In that case, it would stand to reason that the teenager
would be listed as an occasional driver on one of the vehicles in that household.
In the majority of cases, the above scenario should apply. There is a clearly defined
primary residence where the teenager lives with the legally responsible parent and
where that teenager sometimes drives a vehicle.
There are, however, variations in actual situations that can cause confusion for
the insurance company of the parent who does not list the teenager as a driver.
One of those situations is joint custody, where the parents share responsibility
for the teenager who spends half the time with one parent and half with the other.
Another cause for confusion is moving the coverage from one parent’s policy
to the other. The first company may be a reluctant to drop its coverage even though
it has been picked up by the other parent’s insurer. In extreme circumstances,
the parent who originally carried the teenager's insurance may be asked to continue
paying for the coverage or sign a driver's exclusion which would mean that no vehicle
insured by that parent would be covered if the teenager was driving it, even in
an emergency.
A little planning ahead can be very helpful in cases such as this. If you anticipate
a change in custody or living situation for a teenager soon after he or she gets
a driver’s license, I would recommend that getting the license be delayed until
the child is settled into the new situation. The fewer changes you have to make,
the less likelihood that the insurance companies involved will raise questions about
the coverage.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My 18-year-old son is living at home and going to college, and I am going to buy him a car. I carry high liability limits on my other two private passenger vehicles. Can I just get the basic 10/20/10 limits for him to keep my costs down?
The short answer to your question is maybe. You can't put lower limits of liability on your son when listing him as a driver on your vehicle. And you may not be able to choose lower liability limits on the separate car you are buying him. An insurance company has the right to establish underwriting guidelines which require you to have the same liability limits on each of your personal vehicles. The same basic rule of thumb would apply if a young person operates a vehicle that is part of a commercial fleet.
There are a couple of other measures you can take to keep down the cost of your son's insurance. For one thing, you can be aware of what kind of transportation you buy for him. Some of the four-wheel drive vehicles that are so popular with young people can mean an extra 20 percent on his collision insurance. The same is true of high performance sports models. Also, be aware of possible higher insurance costs for specific features on an otherwise standard vehicle, such as specialty wheels and expensive hub caps.
Your son might not agree, but if you are really serious about spending less money, one option would be to buy an older car. You wouldn't be required to carry collision if you purchased a modestly priced older vehicle you didn't have to finance. With no loan on the car, you might want to take the risk of not carrying collision coverage on it. That could be a wise decision if you don't have a lot of money in the car. Another alternative would be for you and your son to share the cost of the car and the insurance.
Finally, don't overlook the fact that discounts can mean savings for drivers of all ages. Check to be sure your son receives any discounts available to him, such as those for driver's education courses or good grades.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I know you are doing everything you can to reduce auto rates
by supporting stricter state laws. Wouldn’t it also help if we had better roads?
I couldn’t agree with you more. The deplorable condition of many of our roads
contributes to highway accidents and drives up our insurance rates in this state.
Now is the time for us to do something about funding for our state’s roadways.
All states pay into the Highway Trust Fund with gasoline tax dollars. The problem
is that some states get back more money than they pay in and others get less. Louisiana
gets back just 83 percent of the money it should be getting.
The message is clear. Louisiana is not receiving its fair share of the federal gasoline
tax we so desperately need to maintain and improve our roads.
Under the present funding formula, 25 other states and the District of Columbia
get back a larger percentage of the Highway Trust Fund dollars they collect than
we do. For example, Connecticut receives $1.68 for every gasoline tax dollar sent
to Washington, Rhode Island receives $2.06, and the District of Columbia receives
a whopping $3.81.
We are working with the state legislature to pass stricter laws dealing with drunk
drivers, uninsured motorists and young drivers, and that can help reduce auto insurance
in a number of ways.
However, when it comes to federal laws and regulations affecting our roads, we must
turn to the people who represent us in Washington. It is up to Louisiana’s
U.S. Senators and Congressmen to see that we get our fair share of the highway fund
money we have contributed. The additional money will help to make our roads safer
and, as a result, bring down our insurance rates.
If the highway trust fund formula is to be corrected, it must be done as a part
of the reauthorization of the Intermodal Surface Transportation Efficiency Act of
1991 (ISTEA), the federal law which determines the distribution of highway funds.
This law expires Sept. 30. The new law must contain funding formulas which give
Louisiana its fair share of federal highway funds.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
It doesn’t seem fair that I buy auto insurance when the
people who are uninsured are allowed to keep driving without it. Why should I continue
to buy auto insurance?
One main reason you should continue to purchase automobile insurance is that it
is required by law. I know how frustrating it is to see the yellow stickers on the
cars of other drivers who do not have insurance. That is why one of the major goals
of my auto insurance reform plan is to get those uninsured drivers off the road.
Approximately 30 percent of all drivers in Louisiana do not carry the auto liability
coverage required by law. This means that if you have an accident that is not your
fault, there is a good possibility that the other driver does not have insurance.
For this reason, many drivers feel the need to purchase uninsured motorists coverage,
which increases their insurance costs. Otherwise, you take the chance of having
to pay for your own damages when you get hit by an uninsured driver. It is unfair
for our law-abiding citizens to be penalized while the uninsured motorist gets a
free ride.
With my proposed plan, we would stop using those yellow stickers you see so often
on the rear window of uninsured cars. My recommendation is that when police stop
an uninsured driver, the car should be towed and impounded until the driver purchases
insurance. In states such as Florida and California, where they impound cars until
the owner buys insurance, the rates of auto insurance have dropped significantly.
In many cities around the state, we tow a car for illegal parking or an expired
meter. Therefore, we should have no problem towing cars of uninsured motorists.
My plan also includes what has been referred to as a “No Pay, No Play”
provision. What this means is that drivers who do not have the mandatory $10,000
liability insurance forfeit their right to use the court system to sue for the first
$10,000 of certain types of damages.
By reducing the number of uninsured motorists, my plan will lower our auto insurance
rates. And this is only one part of my auto insurance reform package. If you would
like a free copy of the highlights of the entire plan, let us know.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Dartment of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
It appears the number of drunk drivers in Louisiana is increasing.
The problem seems out of control. Isn’t there anything we can do to stop these
drivers?
Thank you for your question. This is actually a topic that is very important to
me. I agree with you that the problem of drunk drivers in Louisiana is running rampant.
This is why I included measures in my auto insurance reform plan to address the
issue of drunk drivers.
Nationally, approximately 20 percent of all serious accidents are alcohol related.
In Louisiana, it is 54 percent! That is more than double that of the rest of the
nation. You are correct when you say our drunk driving problem is out of control.
With my auto insurance reform plan, I tackle this dilemma head on. I suggest in
my plan that these drivers suffer increased penalties, immediately. Currently, the
fine for a first DWI offense is $125, which is less than most speeding tickets.
Though speeding is also a serious offense, we must not forget the dangers of drunk
driving as well.
I believe we should increase the fines for first-time offenders. Second offenders
should lose all driving privileges for six months and automatically go to jail for
48 hours. I understand that these penalties may sound severe, but as you pointed
out in your question, our drunk driving problem is quite severe.
For a third offense DWI, I am suggesting mandatory jail time and loss of all driving
rights for five years. We would also seize and sell the car being driven at the
time of the third DWI. Again, this may sound severe, but it is extremely effective.
In Alaska and Oregon, where cars are being taken and sold on second offenses, drunk
driving occurrences have decreased dramatically.
Once we reduce the number of drunk drivers on Louisiana roads, we can also reduce
our auto insurance rates.
As I mentioned, attacking drunk drivers is only one part of my auto insurance reform
plan. If you would like a copy of the highlights of my plan, please contact my office
at 1-800-259-5300 or 225-342-5900.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana
Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write
Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-92
If I buy a motorcycle or a moped, will I need the liability limits (100-300-100) that I carry on my cars? Also, where should I buy motorcycle insurance?
Let’s examine your question about liability limits first. You mentioned that you carry 100/300/100 liability limits on your family cars. This means you have opted to pay for coverage of up to $100,000 for bodily injury to one person, $300,000 for bodily injury to two or more people and $100,000 for property damage if you are liable for damage in an accident involving one of your cars.
For the sake of argument, let’s say that you carry only the minimum 10/20/10 coverage on a motorcycle, and you have an accident that is your fault while operating that motorcycle. Your liability exposure would be as great as it would be if you had an accident in the family car. Whatever reasons you have for carrying high liability limits on your other motor vehicles will apply if your are on a motorcycle, and some two-wheelers that are referred to as mopeds.
Therefore, I would recommend that you carry the same liability limits on the motorcycle that you carry on your other vehicles.
Now for your question about insurance. By all means, shop around, beginning with the insurance company or producer who carries your auto insurance. When getting a price quote, ask if a multi-car discount would apply to the motorcycle insurance. For information about an insurance company you haven’t done business with before, call us here at the Department of Insurance to learn whether the company is a reputable one licensed to do business in Louisiana.
Also, when comparing prices, be sure the quotes include coverage for special features, such as customization or extras added for parades. Most basic policies only cover factory installed items unless you pay extra.
One good thing about buying motorcycle insurance in Louisiana is that we have guest passenger liability coverage, which many states do not have. If someone else is riding on your motorcycle with you and you have an accident that is your fault or at least partially your fault, your liability should pay for at least part of the guest passenger’s damages.
My wife’s teenage son, who lives with us, has had a number of auto accidents that were his fault. Because of his accident record, my insurance company wants to cancel my coverage. What can I do?
Your insurance company does have the right to non-renew your policy, provided you receive a written notice of the non-renewal at least 20 days before the renewal date. This creates a real problem in your case, especially since Louisiana law requires that you at least have liability insurance on your car. There are two possibilities I would suggest you explore.
First of all, ask your insurance representative if you can keep your present insurance by signing a driver’s exclusion, which states that this teenager will not drive your car. A second possibility would be to ask if your insurance representative can get insurance coverage for you with another company.
Let’s look at the second possibility first. If you buy insurance from another company, you may find that the rates are much higher than what you are paying now. Furthermore, in order to get the insurance with the other company, you may be required to exclude this teenager from driving the car anyway. That brings us to your other possibility--a driver’s exclusion on our present policy.
A driver’s exclusion is an agreement between the policyholder and the insurance company stating that the individual named in the exclusion is not authorized to drive your vehicle.
For example, if the stepson named in the exclusion drives your vehicle and is involved in an accident in which he is at fault, you will be personally responsible for the damages to the other vehicle. If you have collision coverage you will also have to pay for the damages to your vehicle. The same would be true of a comprehensive claim, such as a tree falling on the car while the excluded person is parking it in the driveway for you. Even in an emergency situation the excluded person will not have coverage under the terms of your policy.
Discuss both these possibilities with your insurance company representative, and ask about other alternatives that may apply in your particular situation.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.