Louisiana Commissioner of Insurance Jim Donelon outlined his support for five provisions that will be included in this year’s legislative push for insurance reform.
Despite auto insurance decreases last year, Louisiana still has the second-most expensive rates in the nation. The legislative package, Donelon says, will be filed by Sen. Kirk Talbot, the former Republican representative who filed the package that failed to pass last year, and aims to curb rates.
Currently, the state’s jury threshold for auto-accident lawsuits is set to $50,000—the highest in the nation. The second highest, Donelon says, is Maryland with $15,000. Donelon is supporting efforts to lower the threshold to $5,000 as well as repealing “direct action,” which will allow people to sue not just the opposing person in the auto accident, but the insurer as well.
He’s also supportive of a provision that would expand the length of time someone has to file a lawsuit, from one year to two, matching other state requirements. Another provision looks to allow for reduced damages from collateral sources, matching provisions 15 other states have enacted.
“I say that anything we’re different than 49 states, let’s take a look at it,” Donelon says.
The final provision he backs is allowing seat belt usage to be used in trial. Currently, if someone is a victim of an accident and is suing for damages, information about their seat belt use cannot be used in trial.
In response to questions about the existence of a “widow’s penalty,” which increases auto insurance rates for widows, Donelon says no such penalty exists, contending that higher rates pertain to all single women, not just widows. When asked if he thought insurance companies should be allowed to base rates on gender, considering the documented gender-based pay disparity, Donelon expressed his support, saying it’s based on data. He was unable to name where that data comes from.
“Do I think there should be a difference? I do,” Donelson says. “I think that the actuarial cost is what should drive who pays what. I am against education and occupation. I am for gender if it’s actuarially proven.”
He also added that he’s OK with rate fluctuations based on credit scores.
Editor’s note: This story has been updated since it was first published to show that Commissioner Jim Donelon is in favor of repealing “direct action,” in the case of lawsuits. Daily Report regrets the error.
