Louisiana House Panel OKs Hike in Car Insurance Minimum

In a move that insurers say could lead to Louisiana having the highest auto insurance liability rates in the nation, a House of Representatives committee has approved HB 1312, which would raise the minimum insurance coverage Louisiana motorists must carry on their vehicles.

Then-Governor Kathleen Blanco vetoed a similar bill last year. She argued that raising the cost of minimum auto insurance would be too expensive for too many drivers, causing them to drop all coverage.

The insurance industry agrees with that reasoning, and opposes the bill by Representative Erich Ponti, a Baton Rouge Republican. Ponti said his bill would get Louisiana's minimum coverages to the same level as neighboring states.

The House Insurance Committee voted 6-2 to send the bill to the House floor.

The Property Casualty Insurers Association of America (PCI) thinks the bill is "bad news for consumers," according to a statement released by the insurance trade group after the committee vote.

HB 1312 would increase the current minimum limits of $10,000 for bodily injury liability to one person, $20,000 for bodily injury liability for two or more persons injured in any one accident, and $10,000 for property damage liability (commonly stated as 10/20/10 limits) to 25/50/25.

Greg La Cost, assistant vice president and regional manager for PCI said the bill would force many drivers "to buy additional insurance coverage whether they want it or not. If a motorist wants additional coverage, he or she already has the option to purchase more protection."

According to PCI, Louisiana's average annual liability premium for all policyholders is sixth highest in the nation, at $665 per year. If the limits are increased to 25/50/25, the increase to the state's average liability premium would go up to about $790, making it the highest in the nation. The minimum limits increase could affect approximately 1.5 million Louisiana drivers.

House Bill 1312 can be found at http://legis.state.la.us/

Another bill dealing with auto insurance failed to garner support in Louisiana's Senate. Sen. Derrick Shepherd had proposed legislation that would force an insurer to offer homeowners polices to active duty military personnel who receive auto insurance from the same firm.

Sen. Dan "Blade" Morrish objected to another provision in the proposed legislation, one that would expand a unique consumer protection provision in Louisiana law -- a restriction of insurers' ability to drop a policyholder if the homeowner has held the policy for three years or longer.

The bill by Shepherd, D-Marerro, would have expanded that protection to situations when the homeowner moves into a new dwelling, no matter its condition or location.

Morrish, R-Jennings, noted that Louisiana is the only state with such a homeowners protection and called Shepherd's proposed expansion "absolutely ridiculous."

The bill (Senate Bill 61) failed on a vote of 16-17, likely killing it for the session.