BATON ROUGE, La. — The Senate voted 29-8 Monday to pass a bill that could lower auto insurance rates by limiting damage suits by people injured in car wrecks.
The bill by Sen. Kirk Talbot, R-River Ridge, would change aspects of Louisiana’s tort laws that Republican lawmakers and business lobbyists say make it too easy to file lawsuits after car accidents.
Louisiana drivers pay the second highest car insurance premiums in the nation, after Michigan.
Insurance Commissioner Jim Donelon said the bill would reduce insurance rates by at least 10%, and rates could be reduced by as much as 25% in some cases.
Some Democrats said the bill should mandate a minimum reduction of 25%, but Republicans opposed pushing for reductions of more than 10% from most companies.
“I think there is enough uncertainty... that it is very difficult to guarantee any kind of result,” said Sen. Sharon Hewitt, R-Slidell. “I’m really not a fan of the 10% that is in the bill either, because I think it is a dangerous precedent.”
The bill passed by enough votes to suggest that the Senate could override a veto by Gov. John Bel Edwards, a Democrat who has expressed opposition to it.
Talbot’s bill focuses on four key components of tort law. The bill would decrease the monetary amount an injury has to be worth to be decided by a jury rather than a judge; prohibit plaintiffs from suing insurance companies directly; increase the time parties have to file lawsuits to encourage settling out of court; and prohibit using evidence of a plaintiff receiving payment from sources besides the defendant.
Proponents say that judges, who are elected, receive major donations from plaintiff’s lawyers and are more likely than juries to award significant damages. They also say that Louisiana is one of the few states where injured people can sue insurance companies directly and that these changes would encourage more insurance companies to write policies here, increasing competition and lowering rates.
Democratic lawmakers argue that there is not enough evidence to support that changing these laws would result in lower premiums, and tort reform would make it more difficult for people injured in car accidents to receive the compensation they deserve.
“We’re making it more difficult for people to get in a courtroom and have their case resolved,” Sen. Jay Luneau, D-Alexandria, said Monday during the floor debate.
Democrats, including Luneau, have aimed to lower insurance rates by targeting different rating factors that could be blamed for the high premiums.
“Auto insurance in Louisiana is too expensive,” said Luneau. “I don’t think anybody is going to deny that… then the question becomes why is that?”
Luneau argued that rates are not high because of the tort laws, but because insurance companies can set rates based on demographics such as a drivers’ gender, age, marital status or credit score. He filed bills that aimed to prohibit insurance companies from doing so, but the bills were killed in committee.
Opponents worry that Talbot’s bill could result in courts being inundated with jury trials, but Talbot said he has not seen evidence to support that.
The bill’s passage is a major step for Talbot and proponents of tort reform, who have been attempting to change these laws for several years, but to no avail.
Talbot’s bill now moves to the House, which is also expected to consider a nearly identical bill filed by one of its own members. Gov. Edwards supported Luneau’s bills.
In other action Monday, the Senate put off debate on a bill that would kill lawsuits filed by parish governments against oil and gas companies. The bill needs to be discussed first
heard by the Senate Finance Committee because the Legislative Fiscal Office said there "could be a significant increase" in costs to the state if it takes over the lawsuits now being handled by a private firm.
The House rejected a Republican bill to tighten the cap on spending growth next year as the state tries to counter the economic damage from the coronavirus. House members voted 66-31 for the bill, but it needed 70, or two-thirds, of the votes to pass.
Also in the House, Rep. Blake Miguez, R-Erath, dropped his bill challenging Edwards’ emergency powers now that his stay-at-home order has expired.