Louisiana governor to decide on insurance issues

Louisiana Governor to Decide on Insurance Issues

Louisiana Governor Kathleen Babineaux Blanco will be deciding soon on a bill which proposes increase in insurance premiums for the state. The governor can either veto the bill or sign it into law. According to experts in the field, the latter will increase the number of uninsured motorists. That in itself will once again pose a problem to the state.

The bill in question is the Senate Bill 223 by State Senator Mike Michot, R-Lafayette. The said bill proposes to increase the minimum liability auto insurance policy from its current 10-20-10 levels to 25-50-50. The former means $10,000 for bodily injury for a single person, $20,000 for all injuries and $10,000 for damaged property.

The State Governor has until the 18th of this month to decide on the matter. The decision will affect the auto industry in the said state as motorists are already weighed down by the increasing price of gasoline. Increasing insurance premiums would surely make motorists from the state think twice before securing a policy.

Blanco’s special counsel Kimberly Robinson said recently that the governor is yet to decide whether to sign the bill or not.

“She is considering the requests, the legislation and the impact on vehicle owners,” said Robinson. This bill when passed into law will not only affect the motorists from the state but other sectors as well like Louisiana auto parts store albeit indirectly.

According to supporters of the bill, the adjustment in the minimum liability is long overdue. They are pointing out that it was last adjusted in 1983. As time passes, so does the cost of replacing automobiles and having them repaired and this is the main argument of the supporters of the bill.

Those who are opposed of the bill are pointing out to the increased expenses on the part of motorists. After Hurricane Katrina ravaged parts of the state, it is pointed out that an increase on insurance premiums will be an added burden to motorists from the state. If the minimum liability is increased by more than double, it would force car owners to forego securing an insurance policy.

“We think it’s a pretty dramatic increase and it’s going to ultimately raise rates on about 40 percent of the drivers in the state,” said Jeff Brewer, speaking for the Property Casualty Insurers Association of America. The PCIAA represents over a thousand companies which has at least 41 percent of all insurance policies in the United States combined.

The National Association of Insurance Commissioners estimates that in the year 2004, the number of uninsured motorists in the state numbered to 350,000 while insured drivers are about 2.5 million.

“The cost increase could be $100 to $200 per (six-month policy) for drivers,” said Brewer. “We’re concerned that kind of increase, particularly at this time, could result in a lot of people being in a position where they drop their insurance.”

State Senator Francis Heitmeier, D-Algiers vetoed against the bill and has this to say: “There is an insurance crisis right now and we’re hurting. With all that poor, working-class folks are going through right now, this wasn’t the proper timing. We need to give people time to put money away. The people who can least afford it will be hurt the most.”

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