Auto Insurance Rates Increase in Louisiana
More than a million Louisiana drivers saw their auto insurance premiums go up on Friday, January 1st, as a law that increased the minimum liability coverage requirement took effect.
The change was approved by the Louisiana state legislature in 2008, but since insurance companies weren't required to notify policyholders, it's expected that many motorists will be caught off-guard.
Jim Donelon, state Insurance Commissioner, told the press that the increase in insurance rates may come at a tough time for some because of the current economic conditions, but that even so, it's needed in order to bring the almost 30-year-old minimum requirements into line with rising accident-associated costs, including increased costs for vehicle repairs, vehicle replacements, and medical care.
"Certainly there are thousands of drivers out there who can ill-afford this additional cost. That's always the case. I think that's outweighed by the tens of thousands who are left uncompensated by the damage that minimally insured drivers do," said Donnelon.
In addition to the new minimum liability requirement, which raises minimum coverage from "10-20-10" to "15-30-25" ($15,000 for injury/death to one person in an accident, $30,000 to more than one person, and $25,000 for damage to other people's property), several other new laws also took effect in Louisiana last Friday.
Included among the nearly two dozen state laws, most of which are expected to go unnoticed, is a 2% fee on prepaid wireless phone cards with proceeds being directed to statewide 911 system improvements.
How much more will Louisiana drivers pay? According to Richard Piazza, chief actuary for the Louisiana Department of Insurance, the average increase will be $71/year.
Mr. Donelon adds, "Most people probably won't notice it because they don't pay attention to their insurance rates.The people who are on fixed incomes and the ones who it will affect the most will notice it." He also said that he expects the number of uninsured drivers to grow only slightly because of the increase.
