La. House Agrees to Raise Minimum Car Insurance Rates

Louisiana should have higher minimum car insurance coverage requirements for drivers, the state House of Representatives decided June 22, approving a bill that would boost the costs of insurance for thousands of drivers who carry the minimum.

With a 76-24 vote in the House, the Senate-backed bill moved within one step of final legislative passage. It heads back to the Senate for approval of changes, then to Gov. Kathleen Blanco’s desk.

Louisiana law currently 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.

Sen. Mike Michot’s bill would raise 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 higher costs of medical care.

Opponents said the bill would raise costs on people who couldn’t afford the increases and would force more people to drop their insurance coverage altogether. The Property Casualty Insurers Association of America estimated the change would increase insurance premiums for 40 percent of Louisiana drivers.

Louisiana’s minimum car insurance coverage requirements were put in place in 1984, said Rep. Danny Martiny, R-Kenner, who supported the change. He said neighboring states all have higher minimum insurance standards.

“Mississippi’s got poor people, Arkansas’ got poor people, everybody’s got poor people. They don’t have these limits,” Martiny said. “It’s a program we put in place in 1984, and we haven’t touched it since then.”

Supporters of the bill said the costs of uninsured damaged get passed onto other insured motorists and the state, for example, in the medical costs incurred at the charity hospital rather than covered by insurance.

Rep. Ronnie Johns, an insurance agent, opposed the bill, saying the insurance cost increases might be too much for some families to bear. He said the costs of insuring a teenage driver could raise as much as $440 a year in some parishes.

“You’re voting for right about a 30 percent rate increase on the poorest people of this state,” said Johns, R-Sulphur.

In a statement, Greg La Cost, assistant vice president and regional manager for the property casualty association, said Louisiana already had the fourth highest auto insurance rates in the country. He said the bill could drive up the number of uninsured motorists.

“So, in the end, the group that benefits the most from this change is the same one that pushed this through the legislature _ the lawyers,” La Cost said.

The minimum vehicle insurance coverage changes would be effective with policies bought or renewed after Jan. 1, 2008.

Senate Bill 223 can be found at www.legis.state.la.us.

Topics Auto Louisiana