Proposal to lower car insurance premiums to be debated during special legislative session
BATON ROUGE - A bill that aims to lower car insurance premiums in Louisiana by limiting injury damage suits will return for debate during a special session after Republican lawmakers could not reach a compromise Monday with Gov. John Bel Edwards.
The bill by Sen. Kirk Talbot, R-River Ridge, was approved for a second time by both the House and the Senate after changes were made to accommodate concerns about some of the terms.
The House voted 66-31 to approve the new version of the bill, and the Senate approved it 28-10, shortly before the regular legislative session ended at 6 p.m. Monday.
Democrats have said that the bill would make it too difficult for some people injured in car wrecks to receive fair compensation, and Edwards has threatened to veto it. Talbot told the Senate that he had constructive talks with Edwards but could not reach a deal on all of the issues.
If Edwards vetoed the bill, Republicans in both chambers would need to muster two-thirds of the votes to override it. Monday’s vote in the House fell short of that supermajority, suggesting that Edwards still has leverage to push for more changes as the Legislature moves into a special session to work on a state budget and other bills leftover from the regular session.
Just before the regular session ended Monday, the House voted 63-38 to join the Senate in approving a measure to use $300 million of $811 million that the state will receive from federal COVID-19 relief funds to help small businesses instead of channeling all of the money to help local governments, as Edwards would like to do.
That action also sets up another possible veto showdown with the governor.
The changes in the tort laws and efforts to help businesses hurt by the virus shutdown were among the biggest priorities of lawmakers during the regular session. Lawmakers also voted Monday to temporarily suspend the corporate franchise tax for small businesses. That will reduce state revenue by about $6 million.
Talbot and other Republicans say his tort bill targeted Louisiana’s litigious climate and laws that Republicans say make it too easy to sue. Louisiana drivers pay the second highest car insurance rates in the nation, next to Michigan.
The last-minute changes in the bill included expanding the potential premium reductions to truckers and other commercial drivers and requiring companies to rebate 1.5 times the amount annual premium payments to injured people who win judgments.
Edwards has said he supports alternative measures to lowering insurance rates, like keeping companies from charging different rates to drivers based on gender and other classifications.
Talbot’s bill would prohibit insurance companies from being sued directly. It would increase the time parties have to file lawsuits to encourage settling out of court and decrease the monetary threshold for an injury claim to be decided by a jury rather than a judge. It also would prohibit using evidence of a plaintiff receiving reimbursements for healthcare costs from sources besides the defendant.
The bill would allow for juries to hear whether an injured person was wearing a seatbelt at the time of the accident.
Proponents say changing these areas of Louisiana’s tort laws could lead to at least a 10% decrease in most auto insurance rates. Insurance Commissioner Jim Donelon said rates could decrease by up to 25% in some cases.
Opponents say these changes do not require insurance companies to lower rates. Besides making it harder for injured parties to receive adequate compensation, some say that courts could become overcrowded with jury trials and make it difficult to find jurors. But Talbot said he has not seen evidence of this in other states.
“These are pretty massive changes to our civil justice system that are based on pretty much a guess,” said Rep. Mandie Landry, D-New Orleans, during a committee hearing on the bill.
Democratic lawmakers authored bills that aimed to lower insurance rates by prohibiting insurance companies from setting rates based on a driver’s race, gender, credit score and other demographics. A series of bills by Sen. Jay Luneau, D-Alexandria, gained Edwards’ support but was killed in committee.
Another setback for personal injury lawyers came when a bill by Sen. Heather Cloud, R-Turkey Creek, won final passage Monday. Her bill aims to restrict attorneys from displaying advertisements that could be seen as false or misleading when a person claims to have received the full monetary amount from a judgment or settlement without disclosing how much of that was spent on lawyer fees or court costs.
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