After Tort Reform Failure, Time for Real Insurance Reform | Monroe, LA

Corporate lobbyists claimed that last year’s tort reform law would reduce auto insurance rates significantly and quickly. The opposite has happened — premiums went up. Learn more about this news!


Lafayette Daily Advertiser

Source: TheNewsStar.com

The average Louisiana auto insurance premium is $2,225 per year — 56% more than the national average. And despite political promises, auto insurance premiums are rising this year.

Louisiana requires all drivers to have auto insurance. So state government has a responsibility to make insurance affordable.

Insurance Commissioner Jim Donelon and corporate lobbyists claimed that last year’s tort reform law would reduce auto insurance rates significantly and quickly. The opposite has happened — premiums went up.

It’s time for real insurance reform instead of more legislation to rig the courts against policyholders and pad corporate profits.

First, legislators should end the use of ridiculous non-driving factors like credit score, education, gender and occupation in auto insurance pricing. Your insurance rate should be based on your driving.

Credit information is one of the most important factors that raises premiums. Data analyzed by Consumer Federation of America shows that a Monroe, Louisiana driver with a perfect driving record and excellent credit pays an average annual premium of $826 for basic auto coverage.

But if that driver has the same perfect driving record but fair credit, their average premium rises to $1,200.

And if they have a perfect driving record and poor credit, their average premium skyrockets to $1,709.

"Consumer Reports" even found that Louisiana drivers with perfect driving but poor credit pay much more than Louisiana drivers with excellent credit and a DUI conviction! Studies have found that several auto insurers charged substantially higher premiums to good drivers simply because they work blue-collar jobs. Executives get a sweetheart deal while plant workers pay a penalty, regardless of driving record.

Second, Louisiana should require auto insurers to refund the excess premiums they charged to drivers during the COVID-19 pandemic, when driving was dramatically reduced. While the insurers caved to public pressure and gave back some excess premiums, it was nowhere near enough.

Nationally, auto insurers collected $42 billion in excess premiums while providing only $13 billion in premium relief. In Louisiana, auto insurers should have returned an additional $558 million in premium relief to their policyholders — that’s roughly $160 per licensed driver in Monroe, Louisiana.

Louisiana has allowed these big corporations to greedily rake in profits while so many people are struggling. The Louisiana Department of Insurance should require insurers to provide that money in additional premium refunds to consumers.

Finally, Louisiana should require insurers to be more transparent about what they charge consumers. If we continue to allow big insurance companies to keep their rate-setting secret, we will continue to get taken advantage of.

If legislators are really serious about reducing auto insurance premiums and helping drivers, let’s start with these real insurance reforms.

Eric Holl, Real Reform Louisiana Michael DeLong, Consumer Federation of America Auto insurance premium data in this article were acquired by Consumer Federation of America from Quadrant Information Services, LLC. The premiums are for a 35 year unmarried driver who has been licensed for 19 years and has no accidents, moving violations, or license suspensions. The driver has a high school diploma, rents their home, and drives a 2011 Honda Civic LX on a 12 mile commute, 5 days a week—meaning 12,000 miles driven annually. They also have Louisiana’s state minimum insurance coverage (15/30/25).