Auto insurance rates complex

AUTO ACCIDENTS — The Louisiana Legislature is once again trying to figure out how to lower auto insurance rates following vehicle crashes, which is a complex problem.

“If at first you don’t succeed, try, try again.”

The state Legislature tried and is trying again to enact a law that will lower the cost of Louisiana auto insurance, second highest in the nation. While it is certainly a worthwhile goal, success has been awfully elusive for many years.

Sen. Kirk Talbot, R-River Ridge, tried what is called the Omnibus Premium Reduction Act last year when he was a state representative. The legislation passed the House 69-30, but died in a Senate committee. Talbot tried it again at this year’s regular legislative session and his bill cleared the Senate 29-8 and the House 72-28.

Gov. John Bel Edwards, who has had the political support of attorneys who file auto accident lawsuits that are blamed for costly auto insurance, vetoed the bill. Edwards said no insurance company testified that the bill would lower rates, but it also had a poorly worded addition added at the last minute that even supporters didn’t want.

Rep. Ray Garofalo, R-Chalmette, has taken up the cause this year, along with House Speaker Clay Schexnayder, R-Gonzales.

Garofalo’s House Bill 44 is also called the Omnibus Premium Reduction Act of 2020, but he made it clear during House debate it is his legislation. It passed the House 74-25 Monday and is awaiting action in the Senate. If that vote would hold, it would be four more votes than the two-thirds needed to override another Edwards’ veto.

The Advocate explained the bill’s five parts:

The deadline for filing a suit would be extended from one year to two, an effort to encourage a settlement rather than going to court.A jury could hear a case if the person suing is seeking more than $5,000. The current “jury threshold” is $50,000.Medical expenses would be limited to actual payments made, not what the health care provider charges.Lawsuits would have to be filed against the other driver and not his or her insurance company.Judges and juries would be allowed to know if the injured person filing the suit wasn’t wearing a seat belt.Schexnayder’s HB 57 is called the Civil Justice Reform Act of 2020. It isn’t as detailed as Garofalo’s, but it makes many of the same changes to existing law. However, his jury threshold is $10,000, and the bill was approved 78-22, and is also in the Senate.

Opponents of both bills, like Edwards, say they don’t guarantee rates will fall and the lower jury threshold will clog the state’s court system. Some call the measures insurance company protection bills.

The Garofalo legislation says the expected 10 percent reduction in auto insurance premiums could be reduced from the “presumed rollback amount of 10 percent” if the company can demonstrate to the state insurance commissioner that its costs haven’t been lowered.

Jim Donelon, the current insurance commissioner, was a state representative in 1997, and he sponsored the Omnibus Premium Reduction Act of 1997. It provided for rate reductions for bodily injury and uninsured motorist coverage, unless the insurer could demonstrate at a rate hearing that such decreases would result in inadequate rates.

Democratic lawmakers told the LSU Manship School News Service the current bills don’t require rate reductions and they will make it harder for people who are injured in auto accidents to receive the compensation they deserve.

Rep. Randal Gaines, D-LaPlace, told the news service, “We’ve addressed this for the last eight years, and there’s a reason this bill hasn’t passed. It’s not going to do what it’s proposed to do.”

The Advocate, in an editorial supporting the legislation, said, “While the politics may look dicey for the bill again this year, we believe many of these changes are sensible and reflect the law in other states. There is no single legislative solution to the problem of high insurance rates, but something like the Talbot bill (the Garofalo bill) can be part of a longterm fix.”

Edwards in his veto message on the Talbot bill said other factors that lead to high insurance rates also have to be considered, He mentioned distracted driving, poor road and bridge infrastructure and basing rates on someone’ gender or bad credit rating.

The governor said he worked with Talbot in trying to come up with an acceptable compromise bill that would lower rates. He said he remains willing to work with anyone operating in good faith to reach a compromise and is confident an agreement can be reached.

The Donelon Omnibus Premium Reduction Bill of 1997 passed the House 83-18 and the Senate 35-3. The conference committee report was approved 87-13 and 32-2. Unfortunately, that legislation didn’t help because the state’s auto insurance rates have climbed to second place over the last 23 years.

Louisiana motorists hope something passes this year that does the job, but don’t hold your breath. If rates do go down, it isn’t going to happen overnight.

More from this section

  • Updated

Someone asked me recently where members of Congress are getting the more than $3 trillion it has spent on coronavirus pandemic assistance. They are getting two-thirds of it from individuals, companies and foreign governments, and that is increasing the country’s already-bloated national debt.

  • Updated

Health experts in the state are seeing new trends in the spike of coronavirus cases. For starters, young people are getting sick and potentially spreading COVID-19. The rise in hospitalizations has leveled off but the numbers are still high, requiring more health care workers. And nursing ho…

  • Updated

A reader last week gave me his latest findings on the coronavirus pandemic from studies that he said he really didn’t have time to look up again. However, he added that “a columnist should be aware of them before influencing a large population to support false premises and sacrifice their ow…

  • Updated

The second-guessers wasted no time in criticizing Gov. John Bel Edwards’ decision to extend Phase 2 of the state’s economic reopening from the coronavirus pandemic to Aug. 7. It’s easy to sit on the sidelines and give advice when you don’t have to make the tough decisions.

  • Updated

Louisiana citizens over the age of 65 were happy to get word they could vote by mail, but some don’t like the way the system is working. I voted by mail for the first time and I didn’t like the requirement that I had to get someone to witness my signature on the return envelope.

  • Updated

Those of us who grew up during the Depression years lived during some tough times, but that helped us deal with many problems that life has thrown our way. The coronavirus pandemic has complicated our lives as well, and it’s obvious our future is going to be much different.