More than 1 million drivers in Louisiana will be paying more expensive car insurance premium rates starting tomorrow, January 1, 2010, as a new law takes effect increasing minimum liability coverage requirement for auto or vehicle policies.
The said legislation was passed last year, back in 2008. However, many motorists will be caught off-guard as news about this requirement hike only hit headlines in Louisiana during the few remaining days of 2009. Reports say that insurance providers were not mandated to inform policyholders and some of them pretty much left the notification task to be done by State legislators.
Insurance Commissioner Jim Donelon said that the bill to increase auto insurance coverage requirements may be interpreted as difficult because of the economic problems faced by motorists today. However, Donelon aims to remind consumers that a boost in coverage requirements is long overdue to make this almost 30-year-old minimum policy requirement at par with increasing costs caused by increasing number of car accidents, including higher costs of vehicle replacement and repair and medical rehabilitation of victims.
Donelon adds that while there may be thousands of motorists who think that they will not be able to afford additional cost of vehicle insurance, these citizens will always be outnumbered by the tens of thousands of individuals who are left uncompensated by injuries caused by minimally insured drivers. Donelon points out that out of 2.5 million cars and vehicles insured in Louisiana, around 40% percent carry only the basic mandated liability coverage or policy.
At present, State law requires truck and car owners to carry at least ”10-20-10” coverage policies. Death or physical injury to one person per accident requirement is
$10,000, injury or death for more than one individual is $20,000, and the required coverage for damage to another person’s property is $10,000. With changes in the policy requirements, Louisiana will mandate its drivers and vehicle owners starting January 1st to carry at least ”15-30-25” liability coverage.
Louisiana Department of Insurance chief actuary Richard Piazza, said that an average driver who only purchases the minimum requirements will pay $71 more per year per insured vehicle. Experts say that a $71 increase in premium charges or roughly $6 a month is such small amount compared to the benefits that will be received by the added coverage protection.
Reports say that this New Year’s Day will mark the implementation of nearly 24 new state laws. In addition to auto insurance increase, legislation will cause a 2% charge on prepaid mobile phone cards, with proceeds going to the statewide 911 system enhancements.