A new law that supporters say will lower auto insurance rates went into effect with the start of the new year. The tort reform legislation was approved during the June special session. Louisiana Association of Business and Industry CEO Stephen Waguespack backs the changes.
“It is going to finally allow more people to have the right to a jury in Louisiana courtrooms, it is going to put a limit on some of these crazy settlements, and it will also allow evidence of seatbelt usage to go into courtrooms,” said Waguespack.
The law lowers the “jury trial threshold” from 50,000, by far the highest in the nation, to 10,000 dollars.
The legislation sought to lower auto insurance rates by saving insurers money in court settlement costs. Waguespack said legally we’re no longer a national outlier.
“All this bill is going to do is make Louisiana look like all of the other states that don’t allow the frivolous stuff into their courtrooms,” said Waguespack.
Opponents argue the changes will make it more difficult for victims of vehicular or business negligence to win a fair settlement in court, and also pointed out the law does not require insurers to lower rates, and in Legislative hearings, insurers refused to commit to lowering rates if it were implemented. Earlier in the legislative process, a version of this bill included a ten percent rate reduction mandate three years after passage, but that requirement never made it into the final law.
Waguespack said time will show how “silly” some of those arguments from opponents were, and called the opposition trial lawyers trying to protect an old system that they profited greatly from. He says the rate changes won’t happen overnight, but he’s confident they will happen over time.
“It is going to take time to bring the competition that this will bring into the market. This will bring new entrants into the market and competition will lead to more options and lower rates,” said Waguespack.
Comments