Should I Get GAP Insurance?

Authored By: Randall Hart


If you have taken a loan to buy a new vehicle, you may need GAP insurance. GAP insurance pays for the difference between the market value of your car at the time of its loss (totaled or stolen) and the balance you owe on the loan. GAP insurance is also applicable to a lease on which you owe, rather than a loan.

When you buy a new vehicle, it begins to depreciate- lose value- the minute you drive it off the lot. A vehicle may depreciate 20-30% in the first year alone. After the first year, the vehicle’s value will continue to fall. Currently, the average depreciation rate (lost value) is about 18% per year. What you owe on the car- the loan or lease balance- does not fall this fast. That leaves a “gap” between what the vehicle is worth on the market and what you owe. This is commonly referred to as being “upside down.” If you are “upside down” when your vehicle is totaled or stolen, standard auto coverage pays only what the car is worth on the market when the loss occurs. If you owe more on your vehicle than what the vehicle is worth, GAP insurance bails you out of this jam and covers the difference.

If you have paid less than 20% down on a new vehicle or have the vehicle financed for five years or more, you may need GAP coverage. Adding GAP coverage to an auto insurance policy is typically the best buy, but not all car insurance companies provide GAP insurance. Lenders may offer GAP coverage for a flat fee, but this is probably the most expensive way to buy GAP coverage. If your auto insurer does not offer GAP coverage, you can probably purchase stand-alone GAP coverage online that are more affordable than what the auto dealer or lender will charge.

Reasons Why You Might Need More Car Insurance Coverage

Authored By: Randall Hart


An auto insurance policy typically includes several different types of coverage. In this post, we’ll focus on liability coverage. Liability coverage pays others for the damages caused in a collision if you are at fault. Liability coverage pays damages for bodily injury and property damage that, absent the coverage, you will owe personally.

Liability coverage is the insurance Louisiana requires before you are allowed to drive. Most states have minimum coverage requirements. In Louisiana, the minimum coverage for bodily injury is termed 15/30. This provides a maximum liability coverage of $15,000.00 per injured person with a maximum of $30,000.00 per accident. The minimum legal requirement for property damage is $25,000.00.

If you injure someone with your car, claims brought against you could be for a lot more money than the minimum coverage required by law. This is especially true for bodily injury claims. There are two reasons why you might consider increasing your liability coverage for bodily injury claims well above the minimum required.

First, the amount of liability coverage you carry should be high enough to protect your assets from seizure/liquidation in the event of an at-fault crash. Often, experts recommend at least $100,000/300,000 in bodily injury coverage- but even that may not be enough. Take your net worth and subtract your exempt assets to determine what a judgment creditor could recover from you personally. This is the amount that is truly at risk in the event you cause an auto crash that injures someone badly. If you have a million dollar tract of land, you could lose it in a lawsuit if your liability coverage is insufficient. The more assets you have, the more you stand to lose. Your liability insurance should be proportional to your assets.

A second reason you might want liability coverage above the minimum is not readily apparent. In Louisiana, many drivers carry the minimum liability coverage or no insurance at all. Approximately 12% of all Louisiana drivers are uninsured, despite the law requiring insurance coverage. If you have a collision that is not your fault with an uninsured or underinsured driver, your damages, your losses, will not be fully compensated unless you have enough uninsured/underinsured motorists coverage (UM coverage). The maximum UM coverage available to you in Louisiana equals your bodily injury coverage limits. If you carry minimum liability coverage (15/30), the maximum UM coverage is also 15/30. To protect yourself from uninsured loses which are not your fault, you might want to increase your liability coverage to obtain higher UM limits, as well.

UM coverage is inexpensive in comparison to liability coverage. Given the chances of bodily injury claims which are not your fault and caused by uninsured or underinsured drivers, carrying UM limits higher than 15/30 makes good sense.

Property Damage Guide

1. What should I send my insurance company after a wreck?

Send your insurance company a package containing the following:

• Recent pictures of your vehicle before the crash.
• Detailed pictures of the damage to your vehicle from all directions.
• A picture of the odometer clearly showing the mileage on your vehicle.
• A list of any extras installed on your vehicle with the age and the retail cost.
• A used car value from (free online resource).
• The name, address, and phone number of the body shop you prefer to use.
• A statement that you want original manufacturer parts, not aftermarket parts.
• A request to replace your seatbelts if you sustained anything more than a minor collision.
• A copy of the police report or a signed letter from you describing the accident.
• A request that the insurance company let you know immediately if they need more information to evaluate your loss.

2. Can I choose the body shop that I want to use?

You have the right to choose the body shop you want – insurance companies will often try to steer you to a certain body shop. You may be required by your insurance contract to allow a certain body shop or adjuster to inspect your vehicle, but you are not required to use the insurance company’s choice of body shop. Use a body shop that you know and trust based on reputation or experience.

3. What should you tell the body shop who is fixing your car?

You should insist on using original manufacturer parts and fixing the full extent of the damage – Sometimes insurance companies will instruct a body shop to use cheap aftermarket parts that are often lower in quality. You have the right to have your vehicle restored in pre-accident condition, which should include original manufacturer parts.

4. What about replacing my seatbelts?

You should replace your seatbelts after any serious crash. A seatbelt that has already been involved in a major collision may not provide the same benefit during the next collision.

5. Am I entitled to a rental car?

If you are making a claim through your own insurance company, your policy will control whether you are entitled to a rental vehicle and for how long. If the policy does not specify what type of vehicle you can rent or the maximum cost per day, you should insist on a vehicle that is similar to your own.

If a third person caused damage to your vehicle and you are making a claim through their insurance company, you have the right to a rental vehicle that is comparable to your personal vehicle. This is especially true if you have a large family or need a certain type of vehicle, like a truck, for work. Insurance adjusters will often try to put you in the smallest, cheapest vehicle possible.

6. Is there a time limit on your rental vehicle?

If someone else caused damage to your vehicle and you are making a rental claim through their insurance company, there is no set time limit for how long you can keep a rental vehicle. Here are some general guidelines:

– If your vehicle is damaged, but not disabled, you are entitled to a rental vehicle the entire time your vehicle is at the body shop.

– If your vehicle is disabled, but will be fixed, then you are entitled to a rental vehicle from the time of wreck until repairs are made.

– If your vehicle is totaled, you are entitled to a rental vehicle from the date of the crash until a reasonable time period after you have been informed that your vehicle is a total loss, usually around 30 days.

The number of days can change based on the circumstances. If you cannot afford a replacement vehicle until you are paid for your vehicle, you may be entitled to keep your rental vehicle until you have been paid for your vehicle and have time to shop for a new one.

Any time you think your vehicle may be a total loss, it is a good idea to start looking around for a replacement vehicle right away.

7. How do you know if your vehicle is a total loss?

Every insurance company has their own policy about what constitutes a total loss, but there is also a Louisiana law which states that total loss is any damage exceeding 75% of the vehicle’s value. Louisiana Revised Statute 32:702.

8. What to do if your vehicle is declared a total loss?

Insurance companies will often hire third party companies to short change the value of your vehicle. Insist that the insurance company pay the value listed on In most cases, you are entitled to the clean retail value as listed by the NADA in addition to the costs of tax, title, and license.

9. Does the insurance company have to pay for the drop in resale value?

With CarFax, everyone who buys a used car will know if there has been prior damage. So if you get in a wreck 5 days after driving your brand new car off the lot, does the insurance company have to pay for the loss of resale value? This is called a diminution in value claim.

If you are making a claim through your own insurance company, this claim is controlled by the policy. Most do not provide for it.

If a third party caused damage to your vehicle, their insurance company is responsible for a loss of your car’s resale value, but they hate to pay it. You will need a letter from an experienced used car salesman estimating the amount of the loss. You can also find similar vehicles that have recently sold online and compare one with and without accident history.

10. Am I responsible for storage fees?

If a third party caused damage to your vehicle, their insurance company is responsible for all towing and storage fees. If you are making a claim through your own insurance company, your policy will control whether towing and storage fees are covered. Reasonable expenses are usually covered.

11. How long does my insurance company have to pay?

If a third party caused damage to your vehicle, their insurance company has thirty (30) days after “satisfactory proof of loss” to make a written offer to settle your claim. If the insurance company violates this statute, they owe you a 50% penalty, plus attorney fees (if applicable), in addition to the original claim. You can provide “satisfactory proof of loss” by sending the package described above. Louisiana Revised Statute 22:1892.

If you are making a claim through your own insurance company, they are also required to make a written offer within thirty (30) days of receiving satisfactory proof of loss. Additionally, they must pay your claim within sixty (60) days to avoid a penalty. Louisiana Revised Statute 22:1973.

What is the difference between the minimum auto liability insurance required in Louisiana and Texas?

Out of the 50 states, 48 require some kind of minimum liability auto insurance coverage as a condition of driving an automobile on the state’s highways. Minimum coverage requirements among the various states vary greatly.

In Louisiana, minimum liability limits are $15,000 for each injured person, up to $30,000 per accident, and $25,000 for property damage per accident. This basic coverage is called 15/30/25 coverage.

In Texas, the minimum liability limits are currently $30,000 for each injured person, up to a total of $60,000 per accident, and $25,000 for property damage per accident. Short hand notation for this coverage is 30/60/25.

There is another important distinction between Louisiana and Texas automobile insurance requirements. In Louisiana, uninsured/under insured motorist coverage is automatically required with each auto liability policy unless it is specifically waived by the insured. Absent a properly executed waiver, UM/UIM coverage in Louisiana is automatically provided. This is true, even if no insurance premium was ever paid for this coverage.

In Texas, UM/UIM coverage is considered an additional, optional coverage. In Texas, this coverage carries an automatic $250.00 deductible.

Because minimum liability coverage in Louisiana is so low, Broussard & Hart highly recommends carrying UM/UIM coverage. This coverage is not expensive in comparison to liability coverage rates. This coverage is for your protection in the event you are not at fault in causing an automobile crash and the at-fault party is either uninsured or under insured.

In Louisiana, the estimated percentage of uninsured motorists is 13.9% -well above the national average. Louisiana is ranked 16th in the nation for the percentage of uninsured drivers. Oklahoma is number one, with 25.9% (over 1 in 4) of its drivers uninsured.

What is the Wrongful Death Statute of Limitations in Louisiana?

According to Louisiana State Law Article 2315.2 any actions must be made within

 “one year from the death of the deceased.”

This article means that lawsuits must be filed within a year, although it could take years to actually complete litigation and receive compensation. A wrongful death action is permissible in the state of Louisiana “if a person dies due to the fault of another”. The law also provides limits on who can file a lawsuit on behalf of the deceased. The one year limitation applies to malpractice, product liability, premise liability and personal injury.

If you suspect your loved one is the victim of wrongful death it is important to talk to an attorney as soon as possible. Once the statute of limitations has passed you will not be able to sue an individual or company for compensation. As many victims’ families learn it can be very expensive to take care of a loved one who has been injured. An attorney will be able to determine if your case is viable and how long you have to file your suit.

What types of compensation does the law allow?

A wrongful death claim can include medical expenses, loss of income, loss of opportunity, pain and suffering, emotional damage and loss of companionship. Learn more about compensatory damages. The law also allows a wrongful death victim’s estate to pursue punitive damages that may go above and beyond compensation.

Get More Information

Visit our information center for more advice on wrongful death claims.  We’re available 24/7 to help you. Give us a call or fill out our contact form to get help.