No Pay, No Play
~ or:  Make Sure You Pay Your Car Insurance On Time ~
I spoke to a group last week and was surprised at how few knew of Louisiana’s “No Pay, No Play” compulsory automobile insurance statute (La. R.S. 32:866).
If you are not insured (or if you are late in paying your car insurance premium), and you are injured in an automobile accident, you cannot recover the first $15,000.00 in damages from the person who caused your injuries.  This can be devastating to an individual who has no health insurance, or has a high-deductible health insurance policy.Louisiana’s No Pay, No Play statute would affect a driver who is late on her payment to her auto insurer as follows:

Driver is injured when she is rear-ended by a distracted driver.  She is transported from the accident scene by ambulance ($1,000 bill to be invoiced to patient) to the ER.  She is treated for injuries in the emergency room, gets X-Rays and prescription medication ($2,500.00 bill to be invoiced to patient).  The ER doctors refer her to an orthopedist for a follow-up.  She obtains a copy of the Accident Report which lists Allstate as the insurer of the at-fault driver.  The following week, she borrows from her sister and pays cash for the orthopedic follow-up ($500), assuming she will get reimbursed by the at-fault driver’s insurance.  She is referred for an MRI ($1,500) which she pays by credit card.  She visits the Orthopedist for a follow-up, pays again by using her card ($350), who then refers her to Physical Therapy.  She realizes that she cannot afford P.T. without health insurance and she is hoping an Allstate adjuster returns her call.  In the mail one day, she receives the Ambulance bill, the E.R. bill, her credit card bill, and a letter from Allstate referencing “Louisiana Revised Statute 32:866” and explaining that Allstate is not obligated to pay for her injuries and its insured only has “15,000/30,000 liability limits.”

She visits an attorney for help and receives the bad news:  She has run up $5,850 in medical bills and will probably run up $10,000 in P.T. bills if she opts to get the treatment she needs.  She may even need additional orthopedic follow-ups, diagnostics, treatment, and/or surgery.  But Louisiana’s No Pay, No Play statute bars her from recovering the first $15,000 in damages because she was not carrying insurance when she was rear-ended.  Furthermore, the at-fault driver was carrying an Allstate policy with minimum liability limits.  As such, if he causes an injury while driving his car, his Allstate policy will only pay out $15,000 in coverage per person or $30,000 total per accident.  “$30,000 per accident,” the lawyer tells her, assumes there are two or more persons injured by the driver’s negligence in “the accident.”  So if two are injured by the driver’s negligence, each could recover a max of $15k.  If 3 were injured, a max of $30k would be distributed among them according to need.  As the Allstate insurance policy would have only covered $15,000 in damages, and since she is barred by “No Pay, No Play,” Allstate can essentially mail her the letter and close its file.  She then asks about her damaged vehicle and receives even more bad news:  No Pay, No Play applies to that too (up to the first $25,000 in property damage).  The attorney tells her that he is sorry but he cannot help her.

Moral of  the story?  Pay your car insurance premiums ON TIME.

Every day as an attorney I have the opportunity to answer my clients’ questions and help them through difficult times.  This e-mail seeks to provide similar assistance to all who receive it.  If you have any suggestions please email them to josh@shreveportattorney.com.