Bill to increase mandatory auto insurance coverage advances
The amount of mandatory auto liability insurance drivers are required to carry should be increased for property damage only, not deaths or injuries, the House Insurance Committee said Wednesday.
The panel approved Senate Bill 223 by Sen. Mike Michot, R-Lafayette, 11-5, but only after mandating the higher threshold for property damage. The property damage-only amendment passed 8-7.
As Michot’s bill goes to the full House, it requires that drivers carry policies that would reimburse at least $25,000 for property damage, a $15,000 increase over the present level. The bill would keep in place the existing $10,000 coverage requirement for one injury or death in an accident and a $20,000 minimum for injuries or deaths of more than one person.
Michot wanted the minimum coverage limits increased to $25,000 for the death or injury of one person and property damage, and $50,000 for the death or injury of more than one person.
But insurance industry lobbyists said that the higher limits would cause people who can barely afford the minimum coverage now to drop their auto insurance.
Chuck McMains, a former House member and now a lobbyist for the Property and Casualty Insurance Association, an insurance industry trade association, urged defeat of the bill, even in its amended form. The new limits will “markedly change the market,” McMains said.
He said that 40 percent to 50 percent of the state’s drivers would be affected by the bill.
Before the amendments changed the bill, Michot said the higher limits would mean about a $12-per-month increase in auto insurance premiums. He said he could not estimate what the amended bill will cost. “You will not see a dramatic increase,” even for those who are struggling to afford minimum coverage now.
Michot said the limits have not be increased since the state enacted the mandatory coverage in 1983, when the average cost of vehicles was about $10,600. Now, he said, the average costs of vehicles is about $21,600.
Blake David, a Lafayette lawyer, urged passage of the bill in its original form. He said that Louisiana is tied with Florida for having the lowest threshold among the states on auto mandatory liability coverage.
“The law doesn’t cover the assets on the road now,” David said.
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