More attempts to lower premiums

By Catherine Hunt / LSU Manship School News Service

BATON ROUGE — Two bills that aim to lower insurance rates in Louisiana by limiting damage lawsuits by people injured in car accidents passed the House Monday and will move to the Senate for debate.

Both are generally similar to a bill by Sen. Kirk Talbot, R-River Ridge, that had been approved by the Legislature but was vetoed by Gov. John Bel Edwards on Friday.

It’s unclear if Republican legislators will attempt to muster the two-thirds majority vote needed to override Edwards’ veto of Talbot’s bill or hope that one of the bills written by Rep. Ray Garofalo, R-Chalmette, or House Speaker Clay Schexnayder, R-Gonzales, will have more success in the next two weeks before the special session ends.

The new bills each passed the House by wide enough margins that suggest either could survive a veto if the governor opposed them.

Also Monday, Edwards signed a bill backed by Republican leaders to give $300 million of the more than $900 million in federal coronavirus relief aid to businesses instead of routing all of it to state and local governments, as the governor had preferred.

All three bills aim to lower car insurance rates for drivers in Louisiana, who pay the second highest premiums in the country after Michigan, by changing Louisiana’s tort laws that some legislators say make it too easy for injured people to file lawsuits after car accidents.

Both bills remove the last-minute flaw added into Talbot’s bill that would have required judges to award damages to injured plaintiffs at 1 ½ times the total premiums they had paid, resulting in tens of thousands of dollars more than the bill’s supporters had intended for many plaintiffs.

Garofalo’s bill follows Talbot’s lead and tackles four areas of tort law but with a few changes. The bill would decrease the monetary amount an injury has to be worth to be decided by a jury rather than a judge; prohibit plaintiffs from suing insurance companies directly; increase the time parties have to file lawsuits to encourage settling out of court; and prohibit using evidence of a plaintiff receiving payment from sources besides the defendant.

The bill would also allow juries and judges to hear whether someone was wearing a seatbelt at the time of an accident.

Garofalo’s bill mainly differs from Talbot’s by including a mini-jury process of six jurors and one alternate if a lawsuit demands between $5,000 and $35,000 of interest and costs and if a jury is requested by at least one party. His bill passed 74-24, enough to override a veto from the governor.

Schexnayder’s bill makes similar adjustments to state laws but doesn’t contain as much detail. The bill gained more support than Garofalo’s with a vote of 78-22.

Insurance Commissioner Jim Donelon and supporters say the changes could lower insurance rates by at least 10 percent and possibly up to 25 percent in some cases. However, companies could be excused from reducing rates if they could prove the reduction would lead to the company’s insolvency.

But Democrats say the bills do not require rate reductions, and it will make it harder for people injured in car accidents to receive the compensation they seek.

“We’ve addressed this for the last eight years, and there’s a reason why this bill hasn’t passed,” said Rep. Randal Gaines, D-LaPlace. Referring to the promises that this type of legislation would lead to lower insurance rates, he added, “It’s not going to do what it’s proposed to do.”

Edwards vetoed Talbot’s bill, saying “it is neither a compromise nor a mandate to decrease auto insurance rates in Louisiana.” He then pointed out that no insurance company testified that the bill would lower rates.

“I remain convinced that if we are truly going to reduce insurance rates,” Edwards said, “we need to confront all of the underlying factors that lead to high insurance rates, such as distracted driving, poor road and bridge infrastructure, and discriminatory practices on credit rating and gender that lead to more uninsured or underinsured drivers.”

Garofalo’s and Schexnayder’s bills now move to the Senate, where Talbot’s bill first passed with enough votes to override a veto.