Louisiana governor takes aim at state’s insurance ‘crisis’

Proposed reforms in the Louisiana auto insurance market take square aim at “profiteering” carriers and personal injury attorneys in an attempt to lower costs in the state that consistently ranks among the highest auto insurance premiums in the U.S.

Louisiana Gov. Jeff Landry this week outlined his plans during a press conference in which he said his proposals would hold both trial lawyers and insurance companies accountable, target frivolous claims, and bring greater transparency to the state’s insurance market.

The Bayou state is considered the third most expensive state for car insurance, with average annual full coverage premiums around $3,182, about 37% higher than the national average. Between January 2021 and June 2024, the average cost of full coverage rose by nearly $600. The increasing premiums are largely attributed to a high number of uninsured drivers in the state, frequent natural disasters, and a legal system perceived as favorable to plaintiffs in personal injury lawsuits.

Cost of insurance has become a 'crisis'

“The cost of insurance has become a crisis not only in this state but in the nation,” said Landry, a Republican who assumed office in January of 2024. “Lawyers and insurance companies are equally to blame along with bad or uninsured drivers. Those are the top three items that our citizens believe basically increase the costs of their automobile insurance.”

Landry vowed to not “travel down a continual failed road,” of reform and accused both insurers and attorneys of spending “obnoxious amounts of money” on advertising.

To that end, Landry pledged to support legislation to restrict attorney advertising, which he said fuels a culture of frivolous injury claims.

“Too much of this advertising is having a cultural effect on our society, and it’s not healthy,” he said.

Landry's plan would prohibit insurance companies from passing their marketing costs to consumers through higher premiums.

“I’m just as tired of seeing [New Orleans personal attorney lawyer] Morris Bart as I am of seeing the [GEICO] lizard,” he said. “If the insurance companies want to hire overpaid celebrities to appear in commercials and have geckos sipping on coffee and riding motorcycles, then our citizens should not pay for that in premium increases.”

Landry also wants to quash a law that presumes injuries claimed after an accident were caused by the accident.

“That’s absurd,” he said. “This measure would make it harder for frivolous lawsuits to move forward by making the lawyers and their clients prove their injuries were the result of the car accident and not a pre-existing injury or an injury that occurred after the accident.”

Bart says he's made the 'poster boy'

Attorney Bart, one of the most high-profile trial attorneys in the state thanks to his heavy media advertising, said he is frequently made the “poster boy” by regulators and elected officials but he doesn’t them make much progress in reducing rates.

“At the end of the day, when the [legislative] session is over, lawyers will still be able to advertise, not a single insurance company will reduce premiums, and the citizens of Louisiana will have a little more of their rights taken away from them,” Bart said. “Because they can pass any law they want, and the insurance companies are still not going to agree to reduce premiums.”

Bart said there were no insurance company representatives attending the governor’s press conference who promised to cut rates if the reforms are enacted. Major insurers contacted by InsuranceNewsNet declined to comment and referred questions to the Insurance Council of Louisiana, which asked for written questions.

Insurance companies 'quiet'

“The governor says he’s going to lower premiums, the insurance commissioner says we're going to lower premiums, but the insurance companies are quiet,” he said. “They're not taking part in this debate. I think the conclusion is inevitable.”

Landry said the state’s insurance commissioner should have more power to regulate rates and insurers should reveal more key financial data to consumers and regulators and not call it “confidential and proprietary.

He also wants to ban texting and social media use while driving; reduce undocumented immigrants' use of auto insurance, give 5% discounts to commercial vehicles that us dashboard cameras and prohibit using credit scores to set rates.

On Thursday, the state’s insurance commissioner, Tim Temple, who was inexplicably not invited to the governor’s press conference, advanced reform proposals of his own and corrected what he said were errors in Landry’s presentation.

Commissioner's authority cited

"The governor said that the Louisiana law does not provide the insurance commissioner the authority needed to regulate insurers; that simply isn't the case,” he said. “I have all the authority I need to deny a rate for being too high, and I exercise it.”

Temple also said insurers were not able to conceal information from regulators.

And while he nicked the governor’s proposals for encouraging “more red tape and overregulation,” he also blamed the state’s personal injury attorneys for boosting auto insurance premiums.

“The only people who benefit from his proposals are lawyers, certainly not the people,” he said. “Those changes will not bring a single carrier to the state or lower anyone's insurance premiums.”

Temple said the state’s high rate of “medical and legal utilization” is the main driver of the high premiums. He said it was unfair to blame insurance company profits on the high rates because, simply, “there are no profits in this market.” He said at least 40 commercial insurers have abandoned the state or curtailed coverage because premiums do not cover the amount they pay in claims.

The package of reforms he endorsed he said were not “feel-good bills or bandaid bills,” the cost drivers he wants to address are medical billing transparency, comparative fault, and general damages.

“Will trial lawyers who sue for massive, excessive payouts attack our solutions and call them harmful to consumers? Probably so,” he said. “But I'm sick of how our state has historically sided with a few trial attorneys over the many citizens and job creators in this state.”

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].