After the failure of the civil liability reform, the time has come for a real reform of insurance


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

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

Insurance Commissioner Jim Donelon and corporate lobbyists have argued that last year’s tort reform law will dramatically and quickly reduce auto insurance rates. The opposite has happened: premiums have increased.

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

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

Credit information is one of the most important factors that increase premiums.

Data analyzed by the Consumer Federation of America shows that a 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, his average premium is $ 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 significantly more than Louisiana drivers with excellent credit and a DUI conviction!

Studies have shown that many auto insurers charge significantly higher premiums to good drivers simply because they have blue collar jobs. Executives get a privileged deal while factory workers pay a penalty, regardless of their driving record.

Second, Louisiana should require auto insurers to reimburse excess premiums they charged drivers during the COVID-19 pandemic, when driving was significantly reduced.

As insurers bowed to public pressure and surrendered excess premiums, this was far from enough.

Nationally, auto insurers collected $ 42 billion in excess premiums while providing only $ 13 billion in premium relief. In Louisiana, auto insurers should have reimbursed an additional $ 558 million in premium relief to their policyholders, or about $ 160 per licensed driver in Louisiana.

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

Finally, Louisiana should require insurers to be more transparent about what they charge consumers. If we continue to allow large insurance companies to keep their rates secret, we will continue to be exploited.

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

Eric Holl, Real Reform Louisiana

Michael DeLong, Consumers Federation of America

The auto insurance premium data in this article was acquired by the Consumer Federation of America from Quadrant Information Services, LLC. The premiums apply to a 35-year-old single driver who has been licensed for 19 years and has not suffered any accident, movement violation or license suspension. The driver graduated from high school, rents his house, and drives a 2011 Honda Civic LX 12 miles, 5 days a week, which means 12,000 miles traveled each year. They also have the Louisiana state minimum insurance coverage (15/30/25).


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