Do You Have Enough Car Insurance? The Ins And Outs Of Liability Coverage

We get calls all the time from past and current clients asking whether they have enough car insurance. And after a few of these conversations, we realized something: a lot of people just aren’t sure what kind of coverage they really have. Most simply buy whatever their insurance broker or agent recommends, without fully understanding the details.

So this month’s legal tip is all about liability coverage — what it is, what those numbers on your policy mean, and why having only the state minimum may not be enough to protect you.

What Are Louisiana’s Minimum Coverage Limits?

When you get a quote from an insurance company or broker, they’ll often base it on the state minimum policy limits. In Louisiana, that means:

$15,000 / $30,000 / $15,000

But what do those numbers actually mean?

Breaking It Down:

Bodily Injury Coverage

The first two numbers — $15,000 / $30,000 — refer to bodily injury liability.

• $15,000 is the maximum your insurance will pay per person injured in an accident that was caused by you.
• $30,000 is the maximum it will pay total for all people injured in that one accident.

Example: If you cause a wreck and injure two people, each person could receive up to $15,000. But if three or more people are injured, the total amount paid out is still capped at $30,000 — no matter how many people were hurt or how serious the injuries.

Property Damage Coverage

The third number — $15,000 — is the maximum your insurance will pay for property damage.

This means if you damage someone’s vehicle or other property, your insurance company will cover up to $15,000 in repairs or replacement.

Why The Minimum Isn’t Enough

Let’s be honest — $15,000 doesn’t go very far these days.

• The cost to repair or replace a personal vehicle has gone up significantly.
• Many new vehicles — even compact ones — cost well over $30,000.
• If you total a $40,000 vehicle and only have $15,000 in property damage coverage, you could be responsible for paying that difference out of pocket.

The same applies to injuries. Medical care is expensive, and injury claims can easily exceed $15,000 per person.

What Happens If Your Coverage Limits Are Too Low?

Here’s where it gets serious: if you’re found at fault in a wreck and the damages exceed your coverage limits, you may be personally liable for the difference.

Your insurance provider has a “duty to defend” you, but only up to the policy limits. After that, it’s on you.

Example:
You carry Louisiana’s minimum coverage ($15,000), and someone sues you for injuries. The court awards them $50,000. Your insurance company pays $15,000, and you could be personally responsible for the remaining $35,000.

What Should You Do?

A good rule of thumb: Your coverage should match the value of your assets.

• If your car is worth $35,000, consider at least that much in property damage coverage.
• If you have a home, a savings account, or other key assets, shield them with higher liability limits.

Not Sure What You Have? Let’s Talk.

If you’re unsure whether your coverage is enough, give us a call. We’ll walk you through your current policy and help you figure out what’s best for your situation — no sales pressure, no jargon.

Next month, we’ll break down uninsured/underinsured motorist coverage, along with collision and comprehensive coverages — so stay tuned!