Issue Position: Auto Insurance

Issue Position

Louisiana has the 2nd highest auto insurance rates in the country due to our tendency for lawsuits following an accident. Currently, our legal system is designed in a way that encourages this "sue first, question later" mentality and these additional expenditures by insurance companies must be passed onto the consumer. We must try to reform our legal system if we want to change this predatory mentality and encourage more competition and coverage from insurance companies.

According to US News, Louisiana ranks 49th in auto insurance rates nationwide. Louisiana currently has the highest Jury Trial Threshold in the nation at $50,000, with Maryland coming in second at $15,000. This high threshold encourages frivolous lawsuits and countless settlements which must be reduced in order to begin the process of reducing rates. In 2019, lawmakers attempted to reduce the threshold to $5,000 but were defeated. Louisiana also has a unique rule, commonly referred to as the "Seatbelt Gag" rule which prevents defense attorneys from informing either the judge or jury whether or not the plaintiff was wearing their seatbelt, which could result in further injury during an accident. This results in more high cost lawsuits which clog our judicial system and raise our insurance rates as insurance companies are more inclined to settle than go to trial. The combination of these two issues as well as others not listed here lead to Louisiana's extremely high insurance rates.

Because of high costs of auto insurance, Louisiana has a large number of uninsured drivers because they cannot afford it which leads to more large payouts by insurance companies if an accident occurs with an uninsured driver. In order to stop the constant cycle of raising insurance rates and bring Louisiana to 40th in auto insurance rates in 4 years, Louisiana must start by lowering the Jury Trial Threshold and repealing the "Seatbelt Gag" rule. Along with this, Louisiana must have more transparent rate setting and encourage more competition among insurers. The combination of these solutions would allow insurance companies to lower their rates offering Louisiana citizens more affordable auto insurance.

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