This new Louisiana bill might help lower auto insurance rates — but it has its doubters

Advocate, The (Baton Rouge, LA)

April 16-- Apr. 16--Voting along party lines a Louisiana House committee Monday approved legislation that dramatically restricts auto crash victims' access to the courts in a way that Insurance Commissioner Jim Donelon says he's pretty sure could lower the cost of auto insurance.

Businesses and insurance companies back House Bill 372 that Rep. Kirk Talbot, R-River Ridge, touted as the way to lessen costs for insurance companies. Louisiana's auto insurance rates are among the highest in the country, he said.

Lawyers who represent plaintiffs say that the measure ignores more important reasons for higher premiums, like distracted drivers, and state trial judges argue that the changes will clog the courts.

Five Republicans on the House Committee on Civil Law voted to advance HB372 to the full House. Two Democrats voted against the measure.

Talbot's "Omnibus Premium Reduction Act of 2019" would increase the time wreck victims have to file a lawsuit from one year to two; reduce the threshold for a jury trial from $50,000 to $5,000; offsets damages a defendant has to pay by collateral sources, that is payments made by the plaintiff's own medical insurance, workers compensation and other sources.

Donelon said statistics show that most of the elements of the bill would lower the rates though he's unsure about what impact the "jury threshold" language would have.

Donelon said he had pursuing legislation like Talbot's for years. At least three similar efforts have failed, he said.

Jeff Albright, Independent Insurance Agents/Brokers of Louisiana, said only a few insurance companies are willing to sell policies for automobiles in Louisiana. "When they stop taking your money, there's a serious problem," he said.

Talbot said the legislation also includes a requirement that the insurance companies perform a review of costs and if the costs go down, then so should the premiums. "That's not may, that's shall," Talbot said of the bill's proposed language for an annual actuarial review by insurance companies for three years.

Talbot said extending the deadlines for when a lawsuit would have to be filed, called prescription, would give the plaintiffs a longer period to complete medical treatments and thereby keep negotiations open longer.

Once a lawsuit is filed, added Louis Fey, Professional Insurance Agents of Louisiana Representative on the Louisiana Property & Casualty Insurance Commission, insurance adjusters turn the case over to lawyers and don't pursue a settlement. Settling a case, rather than going to court, significantly lowers costs for insurance companies, he said.

Robert Kleinpeter, a Baton Rouge lawyer, said his problem with the legislation is that it is not based on data that the changes being proposed would translate to lower premiums for drivers. "So, we're left with feelings and perceptions," he said.

According to studies by Property Casualty Insurers of America, he said, the elements that impact costs for insurance companies include urban congestion, the quality of roadways, and distracted drivers as well as the lawsuits surrounding wrecks. "This bill only looks at litigation," he said.

The legislation also would raise the "jury threshold."

Today, if the value of the case is less than $50,000 -- a threshold that is 28 times the national average -- then a judge can decide the case. HB372 lowers that amount, which requires juries to decide the cases.

Speaking for the state's 236 district judges, 21st Judicial District Court Judge Robert Morrison III, of Livingston, said a judge can handle one of these cases in a day, while juries usually need three days. Additionally, many courthouses in smaller parishes only have one courtroom that can handle a jury trial and that fact also will slow resolution of these cases.

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