La. Car Insurance Rates Rise Even After Passing Legal Tort Reform
In spite of the lure of lower auto insurance rates with passage of legal tort reform Louisiana's rates are on the rise!
It was March 2, 2020 when louisianarecord.com reported that Louisiana's Insurance Commissioner Jim Donelon said, working for tort reform is critical for lower insurance rates.
If you recall, it was about that time that Louisiana lawmakers were considering Senate Bill 418, called the Omnibus Premium Reduction Act of 2020, which, if passed, would dramatically change how people injured in car wrecks could seek and receive damages through Louisiana courts.
The crux of the argument, was that passage of this legislation would ultimately end in Louisiana's auto insurance providers lowering rates.
The article from louisianarecord.com highlighted the following:
Donelon believes that the single most important thing as commissioner that he can do for Louisiana consumers is to work with legislators on meaningful tort reform to improve the legal climate in the state.
“Many legislators have expressed interest in supporting us as we work to lower rates for policyholders,” he said. “We have been sharing our knowledge and expertise with all interested parties ahead of the upcoming session.”
The legislation was signed into law by Governor John Bel Edwards in July of 2020.
Fast forward to this week when we get word from the Louisiana Radio Network that despite the passage of this tort reform, auto insurance rates will not only, not be lowered, they will actually go up.
In their article, they highlight that Commissioner Donelon said, “Rates are going up this year actually, 2% to date through October.”
The lailluminator.com reports,
While pushing the legislation last year, proponents said drivers would see rates lowered by 10 to 25% within about a year of the act taking effect, but they have since walked back some of those comments. At Monday’s meeting, Donelon said the 25% estimate he gave lawmakers last year was a “pure guess” and not a promise.
Wait just a minute! Were lawmakers hoodwinked? Maybe. Maybe not. Commissioner Donelon says an increase in traffic fatalities over the past year is a potential cause for the increase. Donelon adds, “And some of that is the result of more miles being driven this year as we come out of the pandemic, but it’s also a continuing effect of distracted driving.”
Proponents of the reform, like River Ridge Senator Kirk Talbot , say that since the new law went into effect this year and it will have to have an impact on rates. According to Talbot, “It might take eight months, nine months to even file a lawsuit so it’s going take that component to really show up later on.”
I guess we'll all have to take the "let's wait and see" posture.