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Committee allows one-time pass for first lapse in auto coverage; bill reported with amendment
Summary
Lawmakers approved House Bill 496 with amendments to grant a one-time reprieve for a policyholder’s first lapse in auto coverage, preventing insurers from imposing a surcharge for that initial lapse. Sponsors said the change protects consumers who experience a brief interruption; industry asked to clarify operational details.
Representative Hebert’s House Bill 496 seeks to limit insurer surcharges tied to short lapses in automobile coverage. After debate the committee adopted amendment set 11‑58, which narrows the original proposal: it would provide a single, one‑time reprieve so that a policyholder’s first short lapse in coverage would not automatically trigger an insurer surcharge or premium increase.
Supporters said the change targets common, everyday situations — missed payments, administrative lapses or temporary gaps — and protects consumers from steep premium penalties for a single mistake or life event. Opponents and industry witnesses asked for details: how companies would verify the lapse, whether surplus‑lines policies should be treated differently, and how surrender/withdrawal and notice processes would operate.
Committee action: The committee adopted amendment set 11‑58 (technical changes clarifying first-lapse relief) and reported the bill with amendments; members asked the sponsor to work with industry to clarify implementation mechanics.
Ending: HB 496 advances to the House with reforms that supporters say will prevent one-time administrative mistakes from producing lasting premium penalties, and the sponsor and insurers agreed to negotiate implementation language before floor consideration.
