The Louisiana House of Representatives recently approved a bill aimed at lowering auto insurance rates in the state known for some of the highest rates in the nation.
According to Watchdog.org, H.B. 372 was passed on April 23 and was sponsored by Rep. Kirk Talbot (R-River Ridge). While the bill has gained a great deal of attention for one of its desired end goals, there are several legal alterations that will may come from its passage.
Among the changes that will come with H.B. 372 is the lowering of the threshold for a civil jury trial. Prior to the passage, the threshold was the highest in the nation at $50,000, but with Talbot's bill the threshold is being dropped to $5,000. Lana Venable, executive director of the Louisiana Lawsuit Abuse Watch, commented on the passage of the bill and the positive changes she believes will occur.
"Rep. Talbot’s HB 372 is a comprehensive piece of legislation aimed at reducing Louisiana’s exorbitantly high auto insurance rates, currently the nation’s second-highest," Venable told Louisiana Record.
Venable said that Louisiana residents pay annual average premiums of more than $2,100 per year, which is 56 percent more than the national average.
"Only Michigan’s rates are higher, as the Wolverine State’s no-fault car insurance system allows for unlimited medical benefits for auto injuries and requires all drivers to carry personal injury protection coverage," Venable said.
Additional changes, Venable said, would provide for reduced damages for the amount paid from collateral sources, which would prevent excessive and unfair payouts.
"The so-called 'collateral source rule' has been abolished in many states, as it prevents a defendant from introducing evidence that a plaintiff has already received payment from a third party for injuries related to the suit," Venable said.
Another welcome change is the fact that the bill repeals the right of direct action against an insurer, a rule which has previously been non-existent and has resulted in individuals directly suing their insurance companies — which brings with it a hefty price tag.
"Louisiana is one of only a handful of states with this statute, allowing a plaintiff to bring a lawsuit directly against an insurance company," Venable said. "In these cases, the insured is treated as a third party to the litigation, and the insurance company itself is the defendant."
All of the proposed changes, Venable believes, will move Louisiana in the right direction and decrease unnecessary costs to hard-working citizens.