Lawmakers reach agreement on bill aiming to lower car insurance rates
BATON ROUGE - Republican lawmakers and Gov. John Bel Edwards agreed Tuesday to make changes to the state’s civil justice system that could limit damages in personal injury cases in an effort to lower car insurance rates.
The deal, on an issue that was a high priority for Republican leaders, came hours before the special legislative session ended Tuesday.
Both the House and the Senate quickly passed the bill, which was sponsored by House Speaker Clay Schexnayder, R-Gonzales. It was one of several “tort reform” bills written to replace a major Republican-backed bill by Sen. Kirk Talbot, R-River Ridge, that Edwards vetoed.
Edwards will sign the new bill into law, said Matthew Block, Edwards’ executive counsel.
Republican lawmakers, backed by business groups and the insurance industry, pushed hard for what they call tort reform, saying that Louisiana’s litigious climate is why drivers in the state pay the second highest auto insurance premiums in the country, after Michigan.
Democrats, backed by lawyers and judges, opposed the Republican measures to change the legal system, noting that some accident victims will receive less in damages and that there is no guarantee that the legal changes will lead to lower insurance premiums.
Democrats supported legislation that would have prohibited insurance companies from determining rates based on a drivers’ gender, age, credit score or marital status. These bills were killed in committee.
Schexnayder’s was one of several bills that sought to find a compromise between the two sides. It passed in the House 84-16 and in the Senate 35-4.
“I think we found a sweet spot that is going to have an effect and is going to send a message to the rest of the state and other states that we’re looking to make changes,” Rep. John Stefanski, R-Crowley, said of the compromise.
The bill focuses on several components of Louisiana laws that have been at the center of the debate.
Schexnayder’s bill lowers the monetary threshold for an injury claim to be decided by a jury rather than a judge from $50,000 to $10,000. Republicans contended that many judges, who are elected and often receive campaign contributions from lawyers representing accident victims, are more likely to award higher compensation for damages than juries.
Opponents, however, expressed concern that a lower threshold and more jury trials could overwhelm the courts.
Schexnayder’s bill also would prohibit lawyers from mentioning a defendant’s insurance company except at the beginning and end of the trial. That was a compromise compared to Talbot’s bill, which would have prohibited plaintiffs from suing insurance companies directly.
The speaker’s bill also repeals a law that prohibits juries and judges from knowing if someone injured in a car accident was wearing a seatbelt at the time of the accident.
The bill aims to ensure injured parties only receive compensation for health care costs actually incurred if their own insurance or discounts from health providers cover some of the total cost.
To compromise, Schexnayder’s bill would allow judges after the trial to examine the difference between the amount paid and the amount billed and award up to 40% of the difference.
Unlike Talbot’s bill, Schexnayder left out language that addressed the time that parties involved in accidents have to file lawsuits. Talbot had hoped that by extending the time, people would be encouraged to settle out of court, reducing the number of lawsuits.
Unlike other possible compromise bills that the Legislature considered, Schexnayder’s does not include a sunset provision which would repeal the law if it does not lead to lower premiums.
Other Republican lawmakers had filed veto-proof resolutions that would have addressed most of the issues in Talbot’s bill as a way to pass similar provisions without the governor’s consent if that had been necessary.