Jim Beam column:State auto insurance sky high

The Louisiana Legislature is supposed to tackle the high cost of auto insurance when it meets in regular session from April 14 to June 12. Lawmakers made some property insurance changes to benefit companies at their 2024 regular session, but the changes really haven't reduced premiums.

Louisiana currently has the most expensive auto insurance in the nation — a $2,883 average per year, according to insure.com. Other expensive southern states are Florida, Kentucky and Oklahoma.

Texas is at $2,043; Mississippi at $2,008; and Arkansas at $1,957. Maine has the cheapest auto insurance at an average $1,175 per year.

My auto insurance experience demonstrates how Louisiana insurance rates have changed. In November of 2021, I was paying $1,617 annually. The company got a 17% increase in the summer of 2023 and my annual premium climbed to $2,784.

My agent said it climbed that much because of the rate increase and there had been two accidents within the past 10 years. One of those involved was my late wife, but he said it didn't matter who was driving.

This past September my premium climbed to $4,536 annually and he said it was because of two accidents in the last three years, not the previous 10. The two accidents were actually minor, but the high cost of auto repairs kept both of them from being minor.

Lawmakers did pass one significant auto insurance change at their regular session, but the bill was vetoed by Gov. Jeff Landry. Current law says persons claiming medical expenses can only receive what Medicare or their insurer pays. However, a court can award that individual 40% of the difference between the amount billed and the amount actually paid.

The bill Landry vetoed ended the court's ability to award that 40%. It also repealed current law that says the jury can only be informed of the amount billed by a medical provider and whether another source has agreed to pay can't be disclosed to the jury.

Landry and the groups supporting him for governor raised at least $700,000 from trial attorneys, according to nola.com. The news report said trial attorneys occupy one side of a decades-long divide in Louisiana politics and opposing them are insurance companies that have fought to limit personal injury lawsuits.

State Rep. Gabe Firment, R-Pollack, and chairman of the House Insurance Committee, confirmed to the Louisiana Radio Network that auto insurance premiums will be tackled at this year's fiscal legislative session.

Firment said natural disasters and road conditions aren't factors causing large auto insurance premiums. He said one of the biggest factors in high premiums is the cost of litigation.

"We file twice as many bodily injury claims as the national average," Firment said. "We file many more bodily injury claims (than) in the states in our immediate geographic area. We litigate at a much higher rate than other states."

Ben Riggs, the executive director of Real Reform Louisiana, said the use of credit scores in setting insurance premiums is a major factor. He wants to see how companies determine a driver's premium. Riggs also agreed with Firment on repair costs.

"When I was 20 years old, replacing a side view mirror on a little Pontiac could cost $50 to $75," Riggs said. "But now that mirror has sensors and cameras and blinkers in it, and so it's a $500 mirror and therefore just more to replace."

State Sen. Jay Luneau, D-Pineville, has been unsuccessful a number of times in trying to get auto insurance companies to quit charging premiums based on credit scores, whether someone is a widow or widower and the gender of anyone over 25.

State Farm back in April listed its reasons for the high cost of auto insurance. They include increased car accidents and injuries, inflation, rising car repair costs because of new technology, costly electric vehicles, distracted driving and weather catastrophes.

Firment told LaPolitics the biggest issue in auto insurance rates is transparency and accountability. He said oftentimes the amount billed for a medical procedure related to automobile accidents is much greater than the actual cost.

"There may be a good reason for that, but let's make sure the jury or the judge has all of the relevant information available to them…," Firment said.

Firment thinks the Legislature can do something about the high cost of auto insurance at their session. However, I'm not placing any bets that they are going to get it done.

Jim Beam, the retired editor of the American Press, has covered people and politics for more than six decades. Contact him at 337-515-8871 or [email protected].

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