Louisiana Bill Seeks to Limit Auto Injury Claims by Undocumented Immigrants

Louisiana House Bill 436, aimed at addressing the state’s auto insurance challenges, proposes to restrict insurance payouts for general damages to auto accident victims who are not lawful residents of the U.S. Sponsored by Rep. Gabe Firment, the bill passed the Senate Judiciary A Committee with a narrow Republican majority and is pending final legislative approval. It specifically targets "unauthorized aliens," defined as individuals residing in the country illegally, barring them from receiving compensation for non-economic damages like pain and suffering while still allowing recovery for medical and property-related expenses.

Supporters of the bill argue it will help mitigate rising auto insurance costs and discourage undocumented immigration. Rep. Firment cited concerns impacting businesses such as commercial trucking firms that face increased insurance premiums, some of which have led to workforce reductions. Firment also clarified that insurers are not prohibited from settling bodily injury claims with undocumented individuals if they choose to do so voluntarily.

Opposition voices, including Senators Sam Jenkins and Jay Luneau, highlight a perceived inconsistency where insurers would continue to accept premiums from undocumented individuals but may deny certain claims, potentially creating ethical and market concerns. They argue this could establish a situation where immigrants purchase policies but are unable to claim the full benefits, particularly for bodily injury or uninsured motorist coverage.

The proposal has significant implications for auto insurers, policyholders, and claims handling practices in Louisiana. It introduces a regulatory distinction based on immigration status, which may influence underwriting decisions, risk assessments, and claim exposure for carriers operating within the state. The measure also reflects broader debates at the intersection of insurance regulation and immigration law enforcement.

As the bill advances toward final legislative consideration, insurance professionals should monitor its potential impact on compliance, claims processing, and market dynamics. The development underscores ongoing efforts by state lawmakers to address auto insurance affordability, balancing fiscal pressures on insurers and consumers with evolving legal frameworks around residency status and claim eligibility.