Louisiana Record

Friday, May 29, 2020

Donelon: There is no 'widow's rate' in auto insurance, but 'patriot's penalty' must be eliminated

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By Zeta Cross | Mar 3, 2020

Jim Donelon | you tube

Louisiana Insurance Commissioner Jim Donelon is frustrated that tort reform has not been front and center recently in media coverage related to high auto insurance rates.

Donelon told the Louisiana Record that comprehensive tort reform should be the No. 1 topic for people who are concerned about the high cost of auto insurance.

“Louisiana has the second highest auto premiums while enduring the 49th lowest income. This is a situation that has grown unbearable for many Louisiana families,” Donelon said.

A lot of media coverage of the issue has instead focused on the so-called “widow’s rate” and the “patriot’s penalty” instead of on the big picture, where tort reform has the best chance of passage than it has had in years, Donelon said.

“We encourage policyholders to resist these attempts to distract from the real issue at hand: reforming our tort system,” John W. Tobler, a representative of the Louisiana Department of Insurance (LDI), said.

Donelon denied that widows are being penalized when it comes to insurance rates. He says insurance agents use actuarial tables and algorithms to calculate rates. According to the tables, single women – whether they are divorced, widowed or have never been married – drive more than married women and also have more accidents.

“The truth is that single women pay higher premiums than married women because of actuarial data that’s used in every of the 50 states,” Donelon said at a February press conference. “It doesn’t matter if you’re a teenager, a single woman or if you’re a widow or if you’re a divorcee.” 

The “patriot’s penalty” is the term used for service members who let their auto insurance policies lapse while they are deployed out of state. Auto insurance costs automatically go up for anyone who lets a policy lapse. Service members who are deployed away from Louisiana usually stop paying for auto insurance when they are living out of state and are not driving at home. 

Donelon said this is a loophole that he would like to see fixed. 

“Commissioner Donelon wants to assure consumers that the LDI does not condone or allow unfair discrimination,” Tobler said. 

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Louisiana Department of Insurance