Wednesday, July 18, 2007

All your rates are belong to us...

Gov. Blanco has until midnight to either sign or veto a law raising the minimum levels for auto insurance(she could not sign it, but who does that anymore). Surely she has been using her time to study the potential risks and benefits of the proposed law, or maybe she was on a trip to England... I'm sure it was an important tax-payer financed trip.

40% of motorists in LA have the minimum levels, and they will see rates rise as much as 30 to 50 percent. The 10% of motorists without insurance will likely rise.

Yes, the current minimums are not high enough to cover current car and medical costs. But this is not the way to go about fixing the insanely high auto insurance rates in Louisiana.

Louisiana needs to move to no-fault insurance. Your insurance would pay for your claims for any accident you are in, your fault or not. This would give people an incentive to purchase higher coverage amounts since they would be covering themselves. The cost of their automobiles are known and would take a lot of guesswork out of buying the right amount of insurance. It would also eliminate the "uninsured motorist" coverage. Since you are covering yourself, it makes no difference if the other driver has insurance or not. Look at your bill and see how much "uninsured motorist" is of the total.

Don't like no-fault. No problem. I have an even better idea. Take the laws of the state with the lowest insurance rates, replace that states name with LA, adopt them, and presto- lower rates. Sounds simple, and it is.

But there is a large force at work in Louisiana that would oppose any reform, trial lawyers. Tort reform and tax reform, two of my favorite pipe dreams.

1 comment:

Nick said...

No-fault insurance would be 100x's better than what we currently have. However, when the legislature tried to pass it a few years back, our state's wonderful ambulance chasers raised enough of a comotion to kill the idea.