PCI Reports La. House Bill 509 Will Harm Safe Drivers

June 17, 2005

In a move that will reportedly unfairly penalize Louisiana’s safe drivers, the Property Casualty Insurers Association of America (PCI) on Friday expressed disappointment over House Bill 509, legislation that will restrict insurers from knowing whether their consumers have received tickets for not wearing seatbelts or helmets.

“Simply put, insurance is based on the premise of risk,” said Greg LaCost, regional manager and counsel for PCI. “Higher-risk consumers should pay more for insurance than their lower-risk counterparts, and the failure to properly assess this risk will mean that safe drivers will have to pay higher premiums to cover higher-risk drivers.”

Insurers utilize many different tools to underwrite and rate consumers for the purposes of assessing risk. Many carriers utilize this information to provide safe driver discounts to consumers that qualify. Passage of House Bill 509 will limit or preclude the use of these safe driver discounts. In addition, other companies may offer lower rates to consumers who have clean driving records (no violations). House Bill 509 would also reportedly preclude companies from providing this benefit as well.

“Passage of House Bill 509 will force safe and lower-risk drivers to pay for the carelessness of higher-risk drivers in the form of increased premiums,” added LaCost. “This bill essentially removes the financial incentives for drivers to obey the laws. We hope Louisiana legislators vote down this bill so that the state’s safe drivers won’t be penalized.”

After its passage earlier in the week from the Senate Insurance Committee, the bill is now on its way to the floor where PCI will reportedly continue to lobby for its defeat.

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