If you think insurance coverage is already complex enough, then you probably don’t want to hear about all the new changes that went into effect on Jan. 1 for automobile rates, hurricane deductibles, home service contracts and fire policies.

The most noticeable change may be the one that has you paying higher rates for auto insurance. Effective immediately, Louisiana automobile insurance carriers are raising the minimum liability limit requirements, which in turn are expected to cause a spike in current premium rates. Adding insult to injury is the fact that Bayou State residents already pay some of the highest premiums in the nation.

Consumers should be on the lookout for changes beginning this week. For example, the minimum coverage for bodily injury liability to one person as well as property damage liability will increase from $10,000 each to $15,000 and $25,000, respectively. While some expect the rate increase to be in the 20 percent range, Insurance Commissioner Jim Donelon said it’ll probably stay a bit lower. “I would not be surprised to see it go to 15 percent,” he said in a press release. Act 921 was authored during the 2008 regular session by Rep. Erich Ponti, R-Baton Rouge, and Gov. Bobby Jindal allowed it to be passed into law without his signature. 

Another new law authored by Rep. Tom McVea, R-St. Francisville, would require insurance companies to state what type of coverage is offered for individual fire plans on the cover of every policy. Act 36 further requires a working example of how hurricane deductibles applied — meaning the amount of damage in monetary terms that must be exceed to trigger a certain deduction. Carriers must also now disclose whether a separate deductible is required for hurricane, wind or named-storm damage, and, if so, one standardized example of how such a separate deductible would be applied under the policy.

Rep. Damon Baldone, D-Houma, is the sponsor of Act 101, which would give the Louisiana Department of Insurance the power to regulate so-called “home service contract providers.” For an annual fee, these providers repair and service homes. Chiefly, such contracts are typically sold to homeowners to insure large appliances like central air or stoves, as well as for basic equipment such as microwaves or televisions. During this year’s session, Baldone said it’s a small industry with a sketchy history of fly-by-night companies and that 15 other states already have regulatory rules. He said companies often close down, leaving consumers in the lurch. “They’re leaving our residents in the hole and then disappearing or shutting down,” Baldone said. The new law requires home-service companies to register with the state Department of Insurance and comply with certain guidelines on insuring contracts and maintaining its net worth.

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