Louisiana Gov. Signs Bill Aimed at Stemming Auto Insurance Hikes for Veterans

June 10, 2020

A bill designed to prevent auto insurance companies from raising rates for deployed members of the U.S. military has been signed by Louisiana’s governor.

Gov. John Bel Edwards signed Senate Bill 16 by Sen. Jay Luneau, a Democrat from District 29, a proposal that received unanimous support in the Legislature, the governor’s announcement said.

Specifically, the SB 16 prohibits “the determination of rate classifications based on the deployment of the insured in the military for at least six months,” except for the provision of rate discounts for military personnel.

In a statement, Edwards expressed his appreciation for Luneau for sponsoring the bill, saying it “effectively ends the so-called Patriot Penalty and guarantees that our military heroes are not charged higher auto insurance rates.”

Edwards said there is still work to be done to lower Louisiana’s too-high auto insurance rates. For instance, in Louisiana, “auto insurance companies can still legally increase rates based on a person’s gender, credit score and marital status. While these injustices remain, I am happy that we have at least crossed another – being deployed – off of the list,” he said.

The consumer advocacy group, Consumer Federation of America (CFA) applauded the governor for signing the bill. In a media release, CFA said the group earlier this year had “called on states to take action after it was revealed that, in several states, GEICO would charge higher auto insurance rates to military servicemembers if they had dropped their coverage during a deployment.”

“It’s outrageous that any auto insurer would punish servicemembers, because they dropped coverage while deployed overseas,” CFA’s insurance expert Doug Heller said in the release. “While this patriot penalty is still allowed in many states, it has been ended in Louisiana and Governor Edwards and Senator Luneau should be applauded for standing up for consumers and soldiers.”

The CFA noted that in March Vermont found the “patriot penalty” to be unfair discrimination and banned its use. California, CFA said, “has long-banned insurers from surcharging drivers based on a break in coverage, whether due to deployment or other reasons.”

SB 16 was part of a package of auto insurance reform bills supported by Edwards during the Louisiana Legislature’s regular session. Other reform legislation backed by the governor include:

  • SB 13 prohibits insurance rate determinations based on risks classified by the gender of an insured over the age of twenty-five.
  • SB 14 prohibits insurance rate determinations based on risks classified by credit score/rating.
  • SB 15 prohibits insurance rate determinations based on risks classified due to the fact that the insured is a widow or widower.

SB 13, 14 and 15 were referred to the Senate Committee on Insurance but did not pass out of that committee.

The Legislature on June 1 passed an auto insurance reform bill aimed at limiting damage claims following car accidents. SB 418, also known as the Omnibus Premium Reduction Act of 2020, was a priority for Republican lawmakers, insurers and business interests but Gov. Edwards has not yet signed it.

Topics Auto Louisiana

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