Insurance organizations said they are hoping Louisiana's governor will make it the ninth state to reject an increase of the minimum liability insurance required of the drivers.

Democratic Gov. Kathleen Blanco has until next Wednesday to sign into law or veto legislation that would more than double the limits currently required of state drivers.

Similar measures have failed to win enactment this year in eight states. Only in Texas has legislation enforcing higher limits opposed by the insurance industry and advocated by a variety of forces been signed by the governor into law.

On the issue of raising limits in general, David Snyder, assistant general counsel for the American Insurance Association, said that such moves impose an undue economic burden on motorists.

“These increases often lead to counterproductive and anticompetitive political intervention to suppress rates that in turn actually harm consumers by inhibiting competition, availability and affordability,” he said.

Both the AIA and Property Casualty Insurers Association of America (PCI) actually oppose compulsory auto insurance in general.

PCI representative Lynn Knauf said that laws mandating consumers buy auto insurance do not reduce the number of uninsured motorists and are virtually impossible to enforce. “States have implemented elaborate systems and spend great sums of money to address this issue, yet the number of uninsured motorists is still [in the] double digits nationally, and some states have more than 25 percent uninsured,” she said.

Mr. Snyder said the impetus for such legislation comes from plaintiffs' attorneys, “who like to have more money to go after to increase their fees.”

In Alabama, Gov. Bob Riley vetoed a mandated coverage bill primarily because he felt it did not allow insurers enough time to make the changes that would be involved in implementing the law.

Legislation in Connecticut, Florida, Kentucky, Louisiana, Nebraska, North Carolina and Ohio has died this year somewhere in the legislative process, according to Ms. Knauf.

In Louisiana, S.B. 223 will raise the current $10,000 for bodily injury liability to one person, $20,000 for bodily injury liability for two or more, and $10,000 for property damage liability to new limits of $25,000/$50,000/$25,000.

The Texas legislation that was signed into law earlier this year will increase the minimum to $25,000/$50,000/$25,000 immediately and then to $30,000/$60,000/$25,000 four years from now.

Louisiana Insurance Commissioner James Donelon has endorsed raising his state's limits, which he noted are the lowest in the country. “As a result, victims of the negligent acts of underinsured drivers and their caregivers are being left holding the bag for the negligence of those drivers,” he said in a letter to the governor.

The state's Independent Insurance Agents and Brokers Association unit has remained officially neutral.

PCI regional manager Greg LaCost urged the governor to veto the bill because of the increased premium costs it will place on drivers, who he said already have the fourth highest auto insurance rates in the country.

The legislation passed the House by a vote of 77-23 and Senate by a vote of 25-12. The governor has until July 18 to decide whether to sign or veto the bill. Both houses are controlled by a Democratic majority.

Special Reports /

Minimum Auto Coverage Bills Lose In 8 States

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