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Compulsory Automobile Insurance….No Pay, No Play

Compulsory Automobile Insurance….No Pay, No Play

Louisiana has compulsory insurance requirements mandating automobile insurance coverage.  Louisiana not only requires automobile insurance but also mandates the minimal amount of coverage required.  The current minimum insurance required is only $15,000/30,000/25,000 which represents an increase from $10,000/20,000/10,000, which increase in coverage limits took effect January 1, 2010.  The purpose of the state’s compulsory automobile insurance requirement is not to protect the owner of the insured vehicle from liability (although such protection results), but to provide compensation for persons injured by the operation of  insured automobiles.  What most may not be aware of is the fact that there are penalties for not maintaining automobile insurance.  Among the penalties are revocation of the vehicle’s registration and cancellation or impoundment of the vehicle’s license plate and criminal sanctions for operating a motor vehicle without insurance.  Another penalty for failing to maintain automobile insurance is the “No Pay, No Play” penalty.  In this regard, Louisiana’s “No Pay, No Play” law imposes an additional penalty to the owner of an uninsured vehicle to the extent that should such an owner be involved in an accident (regardless of fault) and sustain injuries and/or property damages, any such owner forfeits recovery of the first $15,000 of any injury claim and similarly forfeits recovery of any property damages to the extent of the  mandated minimum property damage coverage limit.

The stated purpose of the legislation providing for No Pay, No Play was “to achieve a significant reduction in the premium rate of motor vehicle insurance” and “to encourage all persons who own or operate motor vehicles on the public streets and highways of this state to comply with the [compulsory insurance law].”  Thus, the beneficiaries of the law were intended to be citizens of the state and insurance companies providing insurance coverage in the state.   It is debatable whether the citizens have benefitted as anyone who has insurance can attest to the high costs of automobile insurance, but there is little doubt that the insurance companies have clearly benefitted by the increase in the number of policies issued, not to mention receiving a “windfall” in not having to pay the claims of those who are uninsured yet injured.  Thus, the common reference to the law being Louisiana’s  “No Pay, No Play” law.

Nearly 75 years ago my father, J. Minos Simon, began the family tradition of providing exemplary legal services to the citizens throughout the local communities and the state of Louisiana.  A tradition that I proudly embraced and have tried to fulfill for neartly 30 years.  It is my hope that these periodic publications can, in some small way, serve to continue to help those in our community.