New Louisiana insurance law could save money for policy holders

LAKE CHARLES, LA (KPLC) - The cost of your insurance may soon be going down thanks to a new law passed during this 2012 legislative session in Baton Rouge.

"I think the insurance fraud issue is huge, and I think the way we are handling it is going to be huge," said Senator Morrish.

Insurance fraud is a problem in Louisiana, according to Senator Morrish, but this new law may put a dent in the amount of criminal fraud cases, and it could reduce the amount you pay for coverage.

"A portion of your premium is about fraud," said Senator Morrish. "So as we begin to prosecute fraud, and begin to look hard at how we're going to prosecute these criminals and what the payment will be, I think we'll see less fraud. It should lower your insurance premiums."

The law will now allow the state of Louisiana to access the bank accounts of anyone convicted of insurance fraud.

"We have the ability now to go into their bank accounts and to seize that money that they have gotten in control of through fraudulent insurance practices," said Senator Morrish.

Morrish says the problem is that punishment for insurance fraud in Louisiana is minimal, a fine and possibly a year or two of jail time, not enough to prevent people from committing the crime.

"Essentially, the people that are going to be paying for us to investigate fraud, to prosecute fraud, insurance fraud in Louisiana, are going to be those who are committing it," said Senator Morrish.

Senator Morrish says no matter the type of insurance, the insurance company or the policy holder, this law will affect you.

"I think it's huge," said Senator Morrish. "I think it's huge to the policy holders, whether it's commercial or it's residential."

Senator Morrish says sometimes fraud criminals have millions of dollars in their accounts when they're caught. But now they can't touch it after their time is served.

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