Despite legislation, promised reductions, premiums increase
Louisiana's auto insurance premiums have skyrocketed in 2021 to the most expensive in the nation after legislation was passed promising lower rates.
Members of Louisiana's Task Force on Affordable Automobile Insurance, many who supported the 2020 bill from Republican House Speaker Clay Schexnayder, concealed that the state's rates continued to spike, though the committee chair said the new law hasn't had time to make an impact.
Louisiana's average annual auto insurance premium is $2,839, double the national average and 30% more expensive than No. 2: Michigan. Maine is the cheapest state for car insurance with an average annual premium of $858, according to insure.com While the national average for premiums dropped by 6% this year, Louisiana's average rate increased by 19%, insure.com reported. Forty-one states enjoyed rate decreases.
Schexnayder's bill changed Louisiana's civil litigation rules in an effort to lessen the amount of money people can win against insurance companies and businesses in car accident lawsuits. Opponents called it a giveaway to businesses that damage injured people's ability to receive adequate compensation.
Republican Louisiana Insurance Commission Jim Donelon, a member of the task force, on Monday defended his testimony last year supporting the 2020 bill when he suggested rates could drop by 25% if the legislation passed.
"It was a pure guess," he said of the specific amount of projected savings. "I did not promise (a 25% drop) as opponents of the bill claim."
Donelon wasn't the only one who favored the bill, which drew wide bipartisan support and was the top priority of the business lobby.