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BATON ROUGE Auto insurance rates will rise Friday for more than 1 million Louisiana motorists as a law increasing the required minimum liability coverage goes into effect.

Though the change was approved by the Legislature in 2008, many drivers are expected to be caught off-guard because insurance companies weren’t required to notify policyholders.

Insurance Commis-sioner Jim Donelon said the boost in car insurance bills may come at a tough time for some because of the economic slump. But he said it’s needed to bring the nearly 30-year-old minimum liability requirement in line with rising costs associated with accidents, including higher costs for medical care, repairs and replacement vehicles.

“Certainly there are thousands of drivers out there who can ill-afford this additional cost. That’s always the case. I think that’s outweighed by the tens of thousands who are left uncompensated by the damage that minimally insured drivers do,” Donelon said.

Nearly two dozen new state laws take effect Friday; most are unlikely to attract much attention.

Besides the car insurance increase, another new law slaps a 2 percent fee on prepaid wireless phone cards, with proceeds to go to statewide 911 system improvements.

Cell and landline phone customers already pay a similar fee, but it hadn’t been levied on those who buy packages of prepaid cell phone minutes.

The new law getting the most notice likely will be the auto insurance boost.

About 2.5 million vehicles are insured in Louisiana, and Donelon said 40 percent carry only the minimum liability coverage required.

Louisiana law currently requires car and truck owners to have at least “10-20-10″ liability coverage.

That’s $10,000 coverage for injury or death to one person in an accident, $20,000 for injury or death to more than one person and $10,000 for damage of other people’s property.

The new law changes the levels to “15-30-25.”

The average minimally insured policyholder will pay about $71 more a year for car insurance, said Richard Piazza, chief actuary for the Louisiana Department of Insurance.

“Most people probably won’t notice it because they don’t pay attention to their insurance rates,” Donelon said. “The people who are on fixed incomes and the ones who it will affect the most will notice it.”

Republican Gov. Bobby Jindal didn’t sign the insurance bill by state Rep. Erich Ponti, R-Baton Rouge, but let it take effect without his signature. His predecessor, Democrat Kathleen Blanco, vetoed a similar proposal in 2007.

Opponents of the measure claimed some drivers might drop car insurance in a state where 12 percent of automobiles aren’t covered under an insurance policy.

“There are a lot of people struggling right now, and this may be the straw that broke the camel’s back,” said state Rep. Mert Smiley, R-Port Vincent, during debate on the bill.

Donelon said he expects the number of uninsured drivers to grow only slightly because of the increase.

BATON ROUGE Auto insurance rates will rise today for more than 1 million Louisiana motorists as a law increasing the required minimum liability coverage goes into effect.

Though the change was approved by the Legislature in 2008, many drivers are expected to be caught off-guard because insurance companies weren’t required to notify policyholders.

Insurance Commissioner Jim Donelon said the boost in car insurance bills may come at a tough time for some because of the economic slump. But he said it’s needed to bring the nearly 30-year-old minimum liability requirement in line with rising costs associated with accidents, including higher costs for medical care, repairs and replacement vehicles.

“Certainly there are thousands of drivers out there who can ill-afford this additional cost. That’s always the case. I think that’s outweighed by the tens of thousands who are left uncompensated by the damage that minimally insured drivers do,” Donelon said.

Nearly two dozen new state laws take effect Friday; most are unlikely to attract much attention.

Besides the car insurance increase, another new law slaps a 2 percent fee on prepaid wireless phone cards, with proceeds to go to statewide 911 system improvements. Cell and landline phone customers already pay a similar fee, but it hadn’t been levied on those who buy packages of prepaid cell phone minutes.

The new law getting the most notice likely will be the auto insurance boost.

About 2.5 million vehicles are insured in Louisiana, and Donelon said 40 percent carry only the minimum liability coverage required.

Louisiana law currently requires car and truck owners to have at least “10-20-10″ liability coverage. That’s $10,000 coverage for injury or death to one person in an accident, $20,000 for injury or death to more than one person and $10,000 for damage of other people’s property.

The new law changes the levels to “15-30-25.”

The average minimally insured policyholder will pay about $71 more a year for car insurance, said Richard Piazza, chief actuary for the Louisiana Department of Insurance.

“Most people probably won’t notice it because they don’t pay attention to their insurance rates,” Donelon said. “The people who are on fixed incomes and the ones who it will affect the most will notice it.”

Republican Gov. Bobby Jindal didn’t sign the insurance bill by Rep. Erich Ponti, R-Baton Rouge, but let it take effect without his signature. His predecessor, Democrat Kathleen Blanco, vetoed a similar proposal in 2007.

Opponents of the measure claimed some drivers might drop car insurance in a state where 12 percent of automobiles aren’t covered under an insurance policy.

“There are a lot of people struggling right now, and this may be the straw that broke the camel’s back,” said Rep. Mert Smiley, R-Port Vincent, during debate on the bill.

Donelon said he expects the number of uninsured drivers to grow only slightly because of the increase.

Recent cost increases havent pleased many of Allstate Property & Casualtys customers, though, such as retiree Stephen Rew of Ashland City.

The 60-year-old Rew said his cost for full coverage on two Chevy Suburban vehicles rose by $89.26 a month in September. Im really lucky I can afford insurance because for many years I couldnt afford it, said Rew, who is on military disability.

Consumers react to economy

Motorists with poor driving records are likely to see rates go up even more.

For instance, GEICO Indemnity which serves higher-risk customers got a 6.5 percent increase that goes into effect for renewals on Jan. 21. Rate hike filings for the broader-based pools of drivers served by GEICO General Insurance Co., and Government Employees Insurance Co., call for average increases of 3 percent statewide.

Among other recent rate filings, Alfa Alliance Insurance Corp. got a 6.5 percent increase from the state.

Meanwhile, the soft economy is altering consumers behavior.

Dan Tarantin, chief executive of Direct General insurance, said that the company sees more consumers buying liability-only policies to save money and still abide by state law to carry a minimum amount of car insurance. With unemployment still in double digits statewide, Tarantin also believes that more people are driving without insurance to save money.

Other consumers have decided to increase their deductibles to lower premiums. But experts say thats only a smart move, if the driver can afford to pay more of the cost of repairs out-of-pocket if an accident occurs.

Motorists are also shopping around more and switching carriers to save money, insurance industry executives say. HometownQuotes of Franklin, an online insurance shopping portal, said it has experienced a 25 percent increase in traffic on its Web site this year as more consumers hunt for better deals.

Getahn Ward of The Tennessean can be reached at 615-726-5968 or gward@tennessean.com.