BATON ROUGE, La. (The Center Square/The Livingston Parish News) – The Louisiana Senate on Monday approved a package of changes to how the state’s legal system handles automobile accident claims.
Supporters say the changes could lead to lower automobile insurance rates, though there is no guarantee that will be the case.
Auto insurance rates in Louisiana are among the highest in the nation. Under Senate Bill 418 by Sen. Kirk Talbot, a River Ridge Republican, insurers for private drivers would be required to reduce rates at least 10 percent unless they can convince the insurance commissioner they can’t afford to do so. Commercial insurers would not be asked to lower rates.
“They can still raise rates,” said Sen. Jay Luneau, an Alexandria Democrat who opposes the bill.
Attempts to amend the bill to call for a 25 percent or a 15 percent reduction failed. Commissioner of Insurance Jim Donelon testified during a committee hearing the changes could lead to savings of 25 percent or more.
“If we do nothing, the rates are going to go up,” Talbot said.
The legislation would lower the threshold that guarantees the ability to get a jury trial from a lawsuit worth at least $50,000 to $5,000. Most states have no such threshold, and no other state is higher than $15,000. Proponents say some judges favor plaintiffs, so defendants would have the option to take their chances with a jury.
But opponents say insurance companies can better afford to pay for a civil jury trial, which the party requesting the trial must do in Louisiana. Judges say the change could clog the courts with additional trials, though supporters say other states aren’t inundated with jury trials even with much lower or nonexistent jury thresholds.
Municipal courts in Louisiana handle many small claims but currently are not allowed to hold jury trials. Talbot said the bill would be amended to deal with that issue but didn’t explain how.
The legislation also would take away the right to sue an insurance company directly, rather than the driver that caused the accident. The hope is that courts would be less likely to approve a frivolous claim against an average person rather than a “big, bad insurance company.”
The bills seek to extend the amount of time to file a lawsuit from one year to two, in hopes of giving the parties more time to work out a settlement rather than going to trial. It would let courts consider how much was actually paid for the plaintiff’s medical bills, as opposed to the “sticker price” of a procedure.
The legislation also would allow courts to consider evidence that an injured person was not wearing a seat belt, which could lead to a 25 percent reduction to the possible award for damages.
Luneau argued the sweeping bill violates the constitutional requirement to have a single objective. But state Senate President Page Cortez ruled against him, saying the bill’s “single purpose” is “dealing with liability.”
Senators also rejected adding an amendment that would allow the changes to expire after two years.
The bill passed with a 29-8 vote, which would be enough of a margin to override a veto if it came to that.