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Our Views: These are the steps that should be taken to help lower car insurance in Louisiana

June 16, 2020

Haste makes waste, especially in legislating, so Gov. John Bel Edwards reasonably vetoed a major bill on car insurance that had been amended too quickly in its rush to approval in the regular session of the Legislature.

The veto of the so-called Omnibus Premium Reduction Act of 2020 was not unexpected because of a last-minute and poorly worded addition to the complex and multi-faceted measure. The change mistakenly required some plaintiffs — those with modest injuries and their own medical insurance — to receive tens of thousands of dollars more than their injury cost to treat.

Because the Legislature is now in a special session until the end of the month, lawmakers might address the problem in the original bill by Sen. Kirk Talbot, R-River Ridge, by passing a “clean” version.

However, Edwards, a close ally of trial lawyers politically, stated in his veto message that he’s still not a fan of the bill, which he called “neither a compromise nor is it a mandate to decrease rates.”

This is a complex measure, but it at least has the virtue of its provisions having been extensively debated last year. It was derailed in a Senate committee then, after a large majority voted for it in the House.

The bill included technical changes about how civil lawsuits are filed and how courts operate, including more time for lawsuits to be filed. The bill would also lower the amount of damages sought in order to have the case heard by jury instead of a judge from $50,000 to $5,000 for most personal injury cases, called jury threshold; limit medical expenses recovered to the actual payments made, rather than what a health care provider charges, called collateral source; require lawsuits to be filed against the other driver, rather than the insurance company, called direct action; and allow judges and juries to know if the injured plaintiff was not wearing a safety belt.

All this, according to the theory of business supporters, would lower the court costs facing insurers, and thus lead to reductions in car insurance premiums in Louisiana, second only to Michigan in the nation.

The governor says the changes should be accompanied by a mandate for reducing costs, but that was not included in the bill, and probably won’t be during the special session.

While the politics may look dicey for the bill again this year, we believe many of these changes are sensible and reflect the law in other states. There is no single legislative solution to the problem of high insurance rates, but something like the Talbot bill can be part of a long-term fix.