Legislation that seeks to reduce auto insurance rates by changing the state’s legal system clears the Senate on a veto proof 29-8 vote. River Ridge Senator Kirk Talbot says his measure would result in more jury trials and other reforms that aim to limit damage claims against insurance companies and other businesses. Talbot says these reforms will lead to at least a 10% savings for motorists.
“The Commissioner (Jim Donelon) assured me that they have all the information that they by law can see by the insurance companies to determine whether those costs have gone down and that they will lower their rates accordingly,” said Talbot.
Talbot says Louisiana has some of the highest auto insurance rates in the country and these changes put Louisiana in line with other state’s tort policy. He says that will draw new insurers to the state.
“Competition always favors the consumer because prices will go down,” said Talbot.
Tort reform is a major priority of Republican lawmakers and business lobbying groups.
But Democratic Senator Jay Luneau of Alexandria opposes the bill. He says the wording of the legislation does not guarantee a rate cut.
“It says this section does not prohibit an increase for any individual insurance policy premium if the increase results from an increase in the risk of loss,” said Luneau. “In other words, they can still raise rates.”
During the committee debate, opponents testified that passage of the bill would lead to lower settlements for victims of corporate or personal negligence.
Luneau also targeted the legislation for undermining critical funding sources for local courts and says it fails to address the real reasons behind rising auto insurance rates.
“This bill has some good things in it and it has some really bad things in it and it has some unintended consequences that are going to be costly to all of us,” said Luneau.
The legislation is pending House introduction.
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