BATON ROUGE, La. (WVLA/WGMB) — Louisiana House Republicans advanced legislation Tuesday billed as a fix to the state’s high car insurance rates, amid claims from Democrats that the bill would not accomplish its advertised mission.
The bill, by state Rep. Ray Garofalo (R-Chalmette), would lower the jury threshold for car crash trials from $50,000 to $5,000. Garofalo claims the move would limit the number of lawsuits and save car insurance companies money they would otherwise charge to policyholders.
“I think the health issue is only exacerbating this,” said Garofalo, noting the high unemployment prompted by the ongoing coronavirus pandemic. “This bill will help families because they won’t be required to pay as much for their insurance rates.”
Louisiana drivers pay an average of $2,300 for car insurance, according to most estimates. Only Michigan drivers pay more.
State insurance commissioner Jim Donelon suggests Garofalo’s bill would lead insurance rates to fall by 25 percent within a few years.
Critics questioned Donelon’s math and voiced uncertainty that insurers would trickle those savings onto their rates. The legislation assumes insurance companies would lower rates by at least 10 percent. These companies would still be able to avoid rate cuts if they tell Donelon’s office they cannot afford them.
Garofalo’s bill is not the first of its kind to emerge in recent years. A committee killed a similar measure last year, though last fall’s elections left the Legislature with more conservative Republicans than ever — many of whom campaigned on issues similar to the ones the Chalmette Republican raised Tuesday.
The legislation heads next to the full House, where passage would send it to the Senate. Democratic Gov. John Bel Edwards has not signaled how he would handle the bill reaching his desk.