Zurik: Louisiana lawmakers hope to wipe out ‘Patriot Penalty’ in upcoming session

Louisiana lawmakers working to put a stop to 'Patriot Penalty'

NEW ORLEANS, La. (WVUE) - At least two Louisiana lawmakers plan to address an issue exposed in an InvestigateTV investigation into the so-called ‘Patriot Penalty’ where servicemembers pay more for auto insurance after being deployed.

The bills -- one pre-filed by a Democrat and the other still in the works by a Republican -- agree that insurance companies should stop the practice of penalizing deployed soldiers when they return home.

“It is especially offensive to me that these people are penalized after they come back,” State Senator Jay Luneau, of Alexandria, said.

InvestigateTV found that some auto insurance companies quote deployed military members higher rates. The rate increase happens because some soldiers cancel or let their insurance lapse while they’re deployed and companies penalize the gap in coverage.

For proof, InvestigateTV went to Geico’s website and entered the same New Orleans address, car, and coverage. The only difference in the two quotes -- one is with a civilian and the other is with a deployed service member returning home. Geico quoted the deployed soldier $700 more than the civilian.

Jim Donelon, Louisiana’s Commissioner of Insurance, said the issue should be easily fixed. He said a law already on the books was supposed to address the issue but does not appear to be working as intended.

“In effect, our provision doesn’t do any good,” Donelon said.

As the law stands now, if a deployed Louisiana soldier turns in his or her license plate to the Office of Motor Vehicles, they cannot be penalized for a gap in coverage.

The fix is possible and has been done in one other state -- Florida. The Sunshine State has a law on the books that specifically makes it illegal for companies to charge deployed servicemembers more for insurance after they return.

“The fact there is a drop in coverage while they are busy serving our country isn’t the sign of high risk,” Doug Heller, a nationally-recognized insurance expert with the Consumer Federation of America, said.

“We have a lot of citizens in Louisiana that get deployed, so this is something that definitely needs to be done, so I don’t anticipate any problems getting it passed,” State Senator Kirk Talbot, R-River Ridge, said.

Talbot chairs the Louisiana Senate Insurance Committee and plans on filing a bill that mirrors the Florida law.

“There’s measures to prevent it but I just don’t know if they know about it and those measures seem a bit onerous to have to send in your plate and when you come back you have to restart the whole process,” Sen. Talbot said.

Luneau’s pre-filed bill would also end the practice.

“It’s also offensive to me that some insurance companies are kind of duping people when they come back by telling the people you get a discount because you’re a service member but that’s after they’ve already raised the rates based on them not having insurance for the last six months -- So I want to stop that,” Sen. Luneau said.

Until one of those bills passes and is signed by the Governor, insurance companies will still be able to charge Louisiana soldiers more money each month for car insurance.

“[The insurance companies] they don’t even notice it, but they have the gall to charge it and that’s what’s so outrageous,” Heller said.

InvestigateTV found higher insurance quotes in at least 22 states

InvestigateTV did analysis across the country and found that the Patriot Penalty was applied in nearly half of the states in the country.

InvestigateTV News Content Specialists Emma Ruby and Tess Rowland contributed to this report.

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