Louisiana Car Insurance Lapse: What Act 476 Protects in 2026

Every figure in this article is traced to the primary sources listed under Sources.

No. Under Louisiana Act 476, effective January 1, 2026, an auto insurer may not increase the premium rate or add a surcharge on a motor vehicle insurance policy based on an insured’s first lapse in required liability coverage if the lapse does not exceed 90 days. The statute separately says that removing a discount the insured no longer qualifies for is not treated as a prohibited increase or surcharge.

Can Louisiana Insurers Raise Rates After a Lapse?

No, if the insurer is using your first lapse in required liability coverage and that lapse did not exceed 90 days. Act 476, passed during the 2025 regular legislative session and signed by the governor on June 20, 2025, prohibits a premium-rate increase or surcharge on a motor vehicle insurance policy based on that first lapse. The statute does not use the word “solely” in this new first-lapse provision and does not limit its wording to private passenger policies.

The Louisiana Department of Insurance addressed the amended requirements in Bulletin 2026-01, dated January 7, 2026. The bulletin reminds property and casualty insurers that the updated statute protects a first lapse of 90 days or less, allows a later lapse to result in an increase or surcharge, and provides for a refund of excess premium when an insurer violates the rule. The prior statute generally barred increases based solely on a lapse, subject to statutory conditions and exceptions. Act 476 rewrote that rule and added the 90-day first-lapse limit and five-year reset. The current law also expressly excludes removal of a discount for which the insured no longer qualifies from the definition of an increase or surcharge under this subsection.

How Does the Five-Year Reset Work?

If you maintain continuous coverage for five or more consecutive years following a lapse, the insurer must treat the first subsequent lapse as a first lapse for purposes of this statute. That subsequent lapse receives the same protection if it does not exceed 90 days. This reset does not guarantee that your premium cannot change for unrelated, lawful rating factors.

The law does not create a universal grace period for paying premiums. A first lapse longer than 90 days falls outside the short-lapse protection, and a subsequent lapse may be used in rating even if it lasts 90 days or less, unless the five-year reset makes it a first lapse again. The statute also says that withdrawing a discount the insured no longer qualifies for is not an increase or surcharge under this subsection. Act 476 does not itself prevent cancellation or nonrenewal for nonpayment under other applicable rules.

What Should Louisiana Drivers Do If Their Rate Goes Up?

If your insurer raises your rate after a first lapse of 90 days or less, ask the company in writing to identify the rating factor and whether the lapse was used in calculating the premium. Review your renewal notice, surcharge explanation, and any change or removal of discounts. Keep payment records and lapse notices to document the dates. If the increase or surcharge violated La. R.S. 22:1284.1, subsection C requires the insurer to refund the excess premium that would not have been charged if it had complied.

Frequently Asked Questions

The Bottom Line for Louisiana Drivers

In Louisiana, an insurer may not increase the premium rate or add a surcharge on a motor vehicle insurance policy based on the insured’s first lapse in required liability coverage if that lapse does not exceed 90 days. After five or more consecutive years of continuous coverage following a lapse, the first subsequent lapse is treated as a first lapse again. If you believe a rate increase or surcharge violates the statute, ask the insurer to explain the rating decision in writing and consider filing a complaint with the Louisiana Department of Insurance. The statute requires a refund of excess premium when an insurer violates its provisions.