Louisiana Gov. Kathleen Blanco has vetoed legislation that could have increased auto insurance costs for over 1 million Louisiana motorists, her office said.
The Legislature in June 2007 approved the bill by Sen. Mike Michot, R-Lafayette, that would have altered the rules for minimum automobile liability coverage, essentially raising insurance costs for motorists who only carry the minimum required coverage.
In a letter explaining her veto, Blanco said that 1.5 million of the state’s 4 million drivers carry the minimum coverage. She said Michot’s bill would impose a sudden 20 percent insurance increase on them, possibly leading some to drop insurance altogether.
Michot’s bill “does nothing positive to address the chronic problem of the very large number of owners who do not consistently carry even the minimum liability coverage already required by law. On the contrary, the effect … would be to raise the cost of insurance and thus it is more likely to make this problem even worse,” Blanco wrote in the letter.
State law requires car and truck owners to have minimum motor vehicle liability coverage, known as “10-20-10,” with $10,000 coverage for damage of other people’s property, $20,000 coverage for injury or death to more than one person in an accident and $10,000 coverage for injury or death to one person.
Michot’s bill would have raised that minimum requirement to “25-50-25.”
Supporters said the change would bring Louisiana’s 20-year-old insurance coverage requirement in line with the increased costs involved in accidents, accounting for inflation, the higher prices of new cars and the increased costs of medical care.
“While I am disappointed with the veto, I respect the Governor’s decision on this matter. I realize that the timing for consideration of the motor vehicle insurance issue was difficult with citizens across the state already facing rising property insurance costs,” Michot said in a statement.
But he said he hoped the Legislature’s discussions about the mandatory minimum insurance requirement will increase the focus of law enforcement agencies on penalizing uninsured motorists.
Senate Bill 223 can be found at www.legis.state.la.us.
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