Reports from Louisiana point out that the New Year will bring a startling new change to the state as more coverage levels will be required from existing policy holders. Of course, with more levels of protection come more expensive auto insurance premiums.
Insurance Commissioner Jim Donelon, said in a recent interview that come January 1, 2010, a new provision in the state legislation will take effect, requiring motorists to have upgraded and much higher levels of car liability insurance. Commissioner Donelon adds that by the first day of 2010, premium rates will go up by approximately 12% – 14% for policyholders with inadequate coverage who will be required to upgrade.
This new law was said to be initiated by Rep. Erich Ponti and Rep. Baton way back during the 2008 session. Even though this law was passed back in 2008, Rep. Ponti said execution got delayed until January 7 to give enough time for motorists to be warned and for them to adjust to this new policy. Sources say that Ponti’s law was approved by the Legislature with only eight votes that vetoed it, and it was Gov. Bobby Jindal who allowed it become a law. This new form of legislation will affect all drivers with minimum liability coverage written on or after this year’s New Year’s celebration. Because of this new law, the new car insurance coverage limits will be increased, for vehicle and property damage – from the original $10,000 to $25,000; for the injury or death of one person caused by an accident – from $10,000 to $15,000; for the injuries or death of 2 individuals and more – from $20,000 to $35,000.
Sources say that a study conducted by Donelon reveals that roughly 40% of the total number of Louisiana drivers have only minimum coverage and needs to purchase more auto policy come January, while 12% of the state’s drivers not carrying car insurance at all.
Meanwhile, Independent Insurance Agents and Brokers of Louisiana Chief Executive officer, Jeff Albright, said that while the state will still remain near the bottom of the list of states with the least amount of mandated minimum liability coverage, having an increase of protection next year is a good way in starting Louisiana’s auto insurance improvement.
When asked on how they think consumers will react to this new law, Donelon and Albright are confident that they will not see motorists drop their auto policies because of higher limits and premiums. Donelon said that given the very long time to adjust, drivers will embrace and appreciate this extra protection the state is mandating.