Reforms put in place in 2024 are a constructive transfer towards repairing Louisiana’s insurance coverage market, which has lengthy suffered from extreme claims litigation and legal professional involvement that drive up prices and, in the end, premium charges.
However extra work is required, Triple-I says in its newest Issues Brief.
Analysis by the Insurance Research Council (IRC) – like Triple-I, an affiliate of The Institutes – exhibits Louisiana to be among the many least inexpensive states for each private auto and householders insurance coverage.
In 2022, the common annual private auto premium expenditure per automobile in Louisiana was $1,588, which is almost 40 p.c above the nationwide common and almost double that of the lowest-cost Southern state of North Carolina ($840), IRC stated. Louisianans additionally pay considerably extra for householders protection than the remainder of the nation, with a mean annual expenditure of $2,178, representing 3.81 p.c of the median family revenue within the state – 54 p.c above the nationwide common.
Louisiana’s low common private revenue relative to the remainder of the nation contributes to its private auto insurance coverage affordability challenges, that are exacerbated by its litigation surroundings.
Louisiana Insurance coverage Commissioner Tim Temple has championed a sequence of legislative modifications that he has stated will encourage insurers to return to Louisiana, particularly in hurricane-prone areas.
“There are fewer corporations prepared to jot down property insurance coverage in Louisiana, and that’s plenty of what our laws is designed to do,” Temple stated. “To assist promote Louisiana and alter {the marketplace} in order that corporations really feel like they’re going to be handled pretty.”
In June 2024, Gov. Landry signed into legislation S.B. 355, which places limitations on third-party litigation funding – a follow by which buyers, with no stake in claims other than probably profitable settlements, fund lawsuits geared toward entities perceived as having deep pockets. Third-party litigation funding drives up claims prices and delays settlements, which find yourself being handed alongside to customers within the type of greater premiums.
This progress was undermined when Landry vetoed H.B. 423, which might have reformed the state’s “collateral supply doctrine” that permits civil juries to have entry to the “sticker worth” of medical payments and the quantity truly paid by the insurance coverage firm.
“Along with creating extra transparency and serving to decrease insurance coverage charges, this invoice would have introduced extra equity and stability to our civil justice system,” stated Lana Venable, director of Louisiana Lawsuit Abuse Watch in a press release relating to the veto. “Lawsuit abuse doesn’t discriminate – everybody pays the worth when the ensuing prices are handed right down to all of us.”
Continued reforms in 2025 will probably be essential to assist stop authorized system abuse and promote a extra aggressive insurance coverage market that results in higher affordability for customers, Triple-I says in its temporary.
Study Extra:
Louisiana Is Least Affordable State for Personal Auto Coverage Across the South and U.S.
Despite Improvements, Louisiana Is Still Least Affordable State for Auto Insurance
Who’s Financing Legal System Abuse? Louisianans Need to Know
Louisiana Litigation Funding Reform Vetoed; AOB Ban, Insurer Incentive Boost Make It Into Law
Louisiana’s Insurance Woes Worsen as Florida Works to Fix Its Problems
Hurricanes Drive Louisiana Insured Losses, Insurer Insolvencies