Louisiana Underinsured/Uninsured (UM) Auto Liability Coverage

Louisiana Revised Statute 22:1295 (formerly La. R.S. 22:1406(D) and 22:680) generally provides that all automobile liability insurance, including excess or umbrella policies, delivered or issued for delivery in Louisiana, and covering liability arising out of the ownership, maintenance or use of a motor vehicle required to be registered in Louisiana, provides UM coverage in an amount not less than the limits of bodily injury (BI) liability coverage for the protection of insureds who are legally entitled to recover non-punitive damages from owners or operators of uninsured or undersinsured motor vehicles unless the insured:

1. Rejects UM coverage;
2. Selects lower limits of UM coverage; or
3. Selects economic only UM.

Any exclusion from coverage in an insurance policy must be clear and unmistakable, and the insurer bears the burden of proving any insured named in the policy rejected in writing the coverage equal to bodily injury coverage or selected lower limits or economic only.

Rejection of UM coverage or selection of lower shall be on a form prescribed by the Louisiana Commissioner of Insurance (COI) and shall be provided by the insurer and signed by the insured or his legal representative.

A properly completed form creates a rebuttable presumption that the insured “knowingly rejected coverage, selected a lower limit, or selected economic only coverage.” The form shall be conclusively presumed to be part of the policy whether or not attached.

A UM rejection or selection of lower limits form is valid for the life of the policy and a new form is not required to be signed for a renewal, reinstatement, substitute, or amended policy. A new UM rejection or selection of lower limits form is only required if the amount of coverage changes.

Compliance with the prescribed form involves six tasks as set forth by the Louisiana Supreme Court in Duncan v. USAA Ins. Co., 950 So.2d 544 (La. 2006):

1. Initialing the selection or rejection of coverage chosen;
2. If limits lower than the policy limits are chosen, then filling in the amount of coverage selected for each person and each accident (or for combined single limits);
3. Printing the name of the named insured or legal representative;
4. Signing the name of the named insured or legal representative;
5. Filling in the policy number (if the number exists) at the time the form is completed; and
6. Filling in the date.

In order for the form to be valid, the six tasks must be completed before the UM selection form is signed by the insured, such that the signature of the insured or the insured’s representative signifies an acceptance of and agreement with all of the information contained on the form. An insurer who is unable to prove that the UM selection form was completed before it was signed by the insured simply cannot meet its burden of proving by clear and unmistakable evidence that the UM selection form is valid. See Gray v. ANPAC, 977 So.2d 839 (La.2008).