EDITORIAL: Lower car insurance by fixing trial lawyers' gamed system

Feb. 28--Drive most places in Louisiana and you'll see a lot of reasons for our rating as No. 2 in America in the cost of car insurance.

Whether it's aggressive -- to the point of reckless -- driving, or tons of people texting and chatting on phones instead of concentrating on the road, or for that matter, crappy roads filled with holes and unsuited to heavy traffic, Louisiana earns its high insurance costs every day.

That's because accidents and, all too often, medical costs from injuries, are part of the cost-basis for insurance companies. They must charge enough in premiums to pay claims and have a profit, or they won't stay in business very long.

Especially in Louisiana.

The debate is now joined over, among all the factors raising Louisiana insurance rates, how important is litigation? With giant billboards advertising plaintiff lawyers, is the cost of lawsuits and settlements part of the problem?

We believe it is, and it is illustrated by a story told by Insurance Commissioner Jim Donelon.

He used as an example Farm Bureau insurance, part of a six-state company that has 17% of its policyholders in Louisiana. But our state accounts for 51% of pending lawsuits in the six states.

Donelon said the figure may have changed a percent or two in either direction but not much over many years.

That does not strike us as a pure coincidence.

A number of bills will be filed in the Legislature to bring Louisiana's system of litigation into line with those of other states.

"I'll be supporting all those bills and testifying for them if asked to do so," Donelon told the Press Club of Baton Rouge.

Among the issues are very technically sounding proposals like lowering the amount of damages that could provoke a jury trial and allowing testimony about whether a seat belt was used, in cases of personal injury.

Donelon presented several instances, like the jury threshold, where Louisiana is far out of line with most states. "Only 13 states have any jury threshold (at all)," he said.

The past elections have shown very significant interest among legislators for meaningful changes to lower car insurance rates. While Donelon's department does not regulate rates for commercial trucks, he said loggers and even the companies that transport nonemergency patients to hospitals have faced dramatic increases in insurance rates. While loggers' rates seem a rural issue, the fact is that car insurance rates hit heavily in the urban centers: Rates are 25% above the state average in metro New Orleans and 13% above the state average in metro Baton Rouge.

Is litigation the sole reason for being second in the nation, behind only Michigan, in car insurance? Surely not.

But no discussion of auto insurance regulation can be complete without regard to bringing our system into line with that of other states -- where just about everybody pays less for car insurance.

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