High car insurance? Why Louisiana GOP lawmakers call tort reform a fix

Local News

BATON ROUGE, La. (WVLA/WGMB) — As the COVID-19 pandemic leaves families and businesses juggling bills, Louisiana’s Republican legislators have bills of their own.

Two bills riding up the state House and Senate ladders, its supporters say, would lower Louisiana’s $2,300 average car insurance rate — the nation’s second highest.

“We have families choosing between paying their auto insurance, feeding their families and paying the rent,” state Rep. Ray Garofalo (R-Chalmette) said Tuesday while presenting his Omnibus Premium Reduction Act.

State Sen. Kirk Talbot (R-River Ridge) is sponsoring similar legislation in the Legislature’s upper chamber.

The sponsors’ goal is to send more car crash cases to juries. Supporters say this would reduce the number of bulky settlements that would otherwise cost insurance companies and their drivers.

“Fender-benders here cost lightyears more than they do in other states because we don’t allow juries in the courtroom,” Louisiana Association of Business and Industry CEO Stephen Waguespack said in an interview Wednesday. “The game is tilted to benefit a handful of trial lawyers who have made us all pay the bill in higher insurance rates.”

But the bills’ critics question whether insurers would pass the assumed savings onto the state’s three million insured drivers.

“It’s just going to make more money for insurance companies and give them all the power in deciding what to do with that money,” said Eric Holl, executive director of Real Reform Louisiana. “We know from history that they’re going to keep that money.”

Under Garofalo’s bill, insurers that don’t lower rates by at least 10 percent would need to show the state that the legal changes haven’t saved them money. But its opponents argue the clause would give insurance companies too many loopholes that would let them keep rates the same.

“That’s why this is happening so quickly, in this session that’s so short, with so many members unable to come and unable to speak out against this,” Holl said.

The COVID-19 pandemic has left legislators spending less of their spring than usual at the State Capitol. They returned there in early May after pausing their annual session in mid-March. The virus has infected multiple lawmakers, including state Rep. Reggie Bagala (R-Cut Off), who died of related complications in April.

Waguespack maintains the tort reform bills are not surprises, but rather years in the making, in a quest to keep Louisiana drivers from driving to other states — and not returning.

“It’s time to draw a line in the sand,” he said. “It’s time to stop that now.”

Louisiana Insurance Commissioner Jim Donelon projects the tort reform measures would save drivers as much as 25 percent on rates, though how long a lowering would take remains unclear.

Critics of tort reform have lodged their own ideas to lower coverage costs. State Sen. Jay Luneau (D-Alexandria) filed bills this year to block insurers from basing rates on credit score, being widowed, gender over age 25, or military service. (Only the last has won support from a legislative panel.)

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