Prohibits increase in motor vehicle liability insurance policies under certain circumstances. (8/1/16) (OR NO IMPACT See Note)
With the implementation of SB34, impacted state laws would focus on consumer protection regarding motor vehicle liability insurance. If an insured individual is involved in an accident where the other party was uninsured or underinsured, they could previously face increased costs to their insurance as a result of asserting an affirmative defense. This bill seeks to mitigate this financial burden, thereby altering the landscape of how liability insurance is managed within the state, ensuring that drivers are not penalized through increased premiums for claims that arise in such scenarios.
Senate Bill 34, introduced by Senator Gatti, addresses the regulation of motor vehicle liability insurance policies in Louisiana. The bill prohibits insurers from increasing premium rates or adding surcharges to motor vehicle insurance policies based on the assertion of an affirmative defense by the insured. This legislative move aims to provide protections for insured individuals, preventing unexpected increases in their insurance premiums under specified circumstances related to motor vehicle accidents.
Overall, the sentiment surrounding SB34 appears to be supportive among consumer advocacy groups who view it as a necessary measure to protect motorists from unjust financial penalties. Supporters assert that it will foster a fairer insurance market, while critics may see it as limiting the ability of insurers to adjust premiums based on perceived risk. Such a stance suggests a significant discussion around the balance of risk and consumer protection in the insurance industry.
One notable point of contention is the potential for adverse selection in the insurance market. Opponents may argue that by limiting the factors that insurance companies can consider when calculating premiums, SB34 could lead to higher overall costs for insurers, which may ultimately be passed on to consumers. Additionally, the bill's changes could spark debates over the efficacy and fairness of insurance risk assessments, as insurers might claim their ability to cover risk is being hampered, potentially leading to wider implications for the insurance market in Louisiana.