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Senate Insurance amends HB 601, siding with big insurance over storm victims.

With hurricane season around the corner, the Senate Insurance Committee voted 5-4 to pass a heavily amended version of HB 601, which will be devastating to Louisiana families and small businesses when their insurance companies won’t pay them. The Senate Insurance Committee's version of the bill rejects the changes made by House Speaker Pro Tempore Tanner Magee, a storm victim from Houma, Louisiana.

The contrast was quite stark—and telling.

The amendments were provided to the committee when they were introduced during the meeting. Three lobbyists for big insurance sat at the table on behalf of the author, promoting the industry-friendly amendments and deflecting questions from opponents for two hours.

In comparison, a Lake Charles storm victim and small business owner was permitted to speak for roughly five minutes at the end of the hearing about the difficulties she faced during the claims process and how the amendments would negatively impact people like her.

Kathi Vidrine, the Lake Charles storm victim and owner of Steamboat Bill's restaurant, provided insightful and compelling testimony about how her insurance company abandoned her after Hurricane Laura.

HB 601 makes substantial changes to Louisiana law and how bad faith claims are handled. It protects big insurance companies that act in bad faith and shifts more of the burden in the claims process over to storm victims. If HB 601 becomes law, insurers can act in bad faith and hide behind the new "willful" standard, which will be virtually impossible to prove. It will also require storm victims with no internet connection, cell phone service, or mail delivery to complete a written proof of loss form as a condition of satisfactory proof of loss claims to prove bad faith.

Senators Royce Duplessis, Katrina Jackson, Gary Smith, and Jeremy Stine voted against the amendments. They thoroughly questioned the three lobbyists, repeatedly asking how this would impact policyholders who have to fight their insurance company. Senator Kirk Talbot was the only vocal proponent of the anti-consumer legislation, though Senators Barrow Peacock, Robert Mills, Louie Bernard, and Michael Fesi joined him in voting for the amendments and the bill.

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Insurance Industry: "Credit Scores" Among Reasons for Louisiana's Rising Insurance Costs.

By Ben Riggs • 16 Feb, 2024

Insurance Industry: "Credit Scores" Among Reasons for Louisiana's Rising Insurance Costs. A new report shows that auto insurance rates are skyrocketing, rising by 26% across the U.S. On average, Louisiana drivers pay $2,909 annually, roughly 6.53% of their income for auto insurance. Wayne Watley at Watley Insurance Group lists “credit scores” among the reasons for Louisiana’s rising auto insurance costs, including poor roads and uninsured motorists. Mr. Watley goes on to say, “It’s a challenge because we’re not one of the richest states, but we have some of the highest premiums.” He is correct—and the data backs him up. Insurance companies use credit scores to determine insurance rates for policyholders. Louisiana ranks 48th in median household income and 49th in average credit score . According to a recent study , safe drivers in Louisiana with poor credit pay 111% more than safe drivers with excellent credit ($1,505 / $713). Consequently, Louisiana has the second-highest auto insurance rates in the nation, which leads to more uninsured motorists, another primary cause of higher insurance rates. The use of credit scores in rate setting also creates perverse incentive structures that make Louisiana roads less safe. In Louisiana, safe drivers with poor credit pay an average of $905 more than drivers with a DWI and excellent credit ($3,548 / $2,643). Meanwhile, traffic fatalities increased by 21% from 2019 to 2022 in Louisiana, and the fatality rate per 100 million vehicle miles traveled increased by 18%, according to KPLC . Louisiana desperately needs real insurance reforms that lower costs, protect consumers, hold insurers accountable, and make our roads safer.