How Louisiana Napoleonic Code Affects Your Trucking Insurance

Why Louisiana Is Different

Every other state in the US bases its legal system on English common law — a system built on judicial precedent where courts follow prior rulings. Louisiana operates under civil law, derived from the Napoleonic Code that France established in 1804. This is not academic trivia. It directly affects how trucking lawsuits proceed, how liability is determined, and how much you pay for insurance.

Common Law vs. Civil Law: What It Means for Truckers

Pure Comparative Fault

In most states, if you are found more than 50% at fault in an accident, you cannot recover damages. Louisiana uses pure comparative fault: a plaintiff who is 99% at fault can still recover 1% of their damages from you. This means virtually every accident in Louisiana has potential liability exposure for carriers, regardless of fault distribution.

For a trucker, this means an incident where you are clearly not the primary cause can still result in a claim against your insurance. Your coverage must account for this exposure.

The 1-Year Prescriptive Period

Louisiana does not use the term “statute of limitations.” Instead, it uses “prescriptive period,” and for most personal injury claims, that period is one year. This is shorter than most states, which means claims come fast in Louisiana. Carriers operating in the state should expect faster claim notifications and shorter timelines for legal proceedings.

The 2024 Direct Action Statute Reform

What Changed

Before August 1, 2024, Louisiana allowed plaintiffs to sue insurance companies directly alongside the insured. This was known as the Direct Action Statute, and it had a measurable effect on trucking insurance costs. Juries who knew the insurance company name and the policy limits tended to award higher damages.

Act 275, effective August 1, 2024, severely restricted direct action:

The 7 Exceptions Where Direct Action Survives

Direct action remains available when:

1. The insured has been declared bankrupt
2. The insured is insolvent
3. Service of process cannot be made on the insured
4. The cause of action is for damages for injury by an uninsured motorist
5. The insured is deceased
6. The insured is a foreign corporation with no agent for service in Louisiana
7. The policy specifically provides for direct action

Will This Lower Rates?

Probably, but gradually. Insurance carriers need to see sustained claims data under the new rules before adjusting rates. Courts have confirmed the law applies to cases filed after August 1, 2024, though some disputes over retroactive application continue. Early indications suggest rates may stabilize, but dramatic drops are unlikely — Louisiana’s legal environment still differs significantly from neighboring states. RMS expects gradual improvement over 2-3 years as claims data matures.

Practical Implications for Carriers

Louisiana litigation environment means:

• Carry above minimums. The state personal auto minimum of $15K/$30K/$25K is dangerously inadequate for commercial vehicles.
• RMS recommends $1,000,000 CSL minimum for any Louisiana operations
• Work with attorneys who understand Louisiana civil law, not just common law
• Document everything — Louisiana code interpretation can hinge on specific facts
• Claims come fast due to the 1-year prescriptive period — report incidents immediately
• The 2024 reform helps but is not a reason to reduce coverage

For carriers also operating in neighboring Texas or Arkansas, understand that crossing into Louisiana changes the legal framework entirely. Your Texas claim experience does not predict Louisiana outcomes.