LAFAYETTE PARISH — Governor Jeff Landry announced major reforms to Louisiana's auto insurance system in response to rising insurance costs.
In a press conference Wednesday, Landry called auto insurance "one of the most pressing issues" affecting the budgets of Louisiana families. Landry emphasized the need for a "balanced approach" to insurance reform, holding both insurance companies and personal injury lawyers accountable.
"Today I'm not here to help any lawyers, and I'm not here to help any insurance companies. I'm here to help the citizens of this state, and so I plan to work on legislation with those behind me to hold both sides accountable," Landry said.
Landry said Louisiana has taken steps in the past to regulate the insurance industry, yet rates have remained high.
"We stand here today seeing very little improvement, and while some of these changes may take time, the profits continue to go up while the amount in our citizens' pockets go down," he said.
Landry pointed to data showing that Louisiana's crash rates are in line with the national average. Despite that, the state has some of the highest insurance premiums in the country, with the annual cost exceeding the national average.
"The only outlier in the numbers is minor injury claims—under which Louisiana is double the national average. So when you look at the data, you say that is the problem. We should focus on the problem," Landry said.
Additionally, Landry called for expanding the powers of Louisiana's insurance commissioner to enable better regulation of the industry.
He also said laws should address advertising by personal injury lawyers, which he believes contributes to excessive claims. Landry said laws should prevent insurance companies from passing on advertising costs to customers.
Addressing Governor Landry’s proposals, Armond Schwing of Schwing Insurance Agency said insurance companies are not to blame for the high costs.
"The truth of the matter is, claims costs in Louisiana are 200 percent higher than neighboring states. We have two times the national average of injury claims in Louisiana. We are 200 percent more likely to sue in Louisiana, and injury claims cost 59 percent higher," Schwing said.
Schwing also warned that Landry’s proposals could hurt customers in the long run.
"The things he wants to do to the insurance companies I feel will have an adverse effect and could drive rates up," he said.
Tim Temple, Louisiana’s Insurance Commissioner, plans to talk about the proposed insurance reforms during a press conference on Thursday.
