BATON ROUGE — Louisiana Insurance Commissioner Jim Donelon has been quoted as saying he believes lawsuit abuse is one of the biggest reasons auto insurance rates are so high in Louisiana, and at least one attorney agrees with him.
An average policy for a Louisiana driver in 2017 cost nearly $2,000 annually, making Louisiana second in the nation for the highest auto insurance rates, according to a story in The Advocate. Adding to that, the Louisiana Department of Insurance recently approved a rate hike of up to 22 percent for 2018.
Kevin Cunningham, partner with Southern Strategy Group and counsel for the Coalition for Common Sense (CCS), agrees with Donelon’s opinion.
Kevin Cunningham
| http://sostrategy.com/staff-item/kevin-cunningham/
“We’ve believed that for a while," he recently told the Louisiana Record. “We do believe that there are some problems in Louisiana, in the laws and the number of lawsuits we have."
Trials by jury in Louisiana are an issue Cunningham and the CCS have been working to change. For an injured person wanting to sue after a motor accident, they’ll have to claim a minimum of $50,000 in damages just to be able to have a trial by jury in Louisiana.
“We have an extremely high jury trial threshold," Cunningham said. "Several states around the country don’t even have a threshold... . If you want a jury trial, you should be able to get one."
The U.S. Chamber’s Institute for Legal Reform recently stated that its research has shown Louisiana to be incredibly lawyer-friendly when it comes to personal injury cases, more so than any other state. Having to claim a larger amount of damages means the awards -- and lawyer's fees -- go up as well.
“We believe that this is problematic," Cunningham said. "It increases settlements, increases the amount that’s claimed in an injury, and also increases the number of settlements up to that $50,000 threshold before a jury has the opportunity to actually get in and look at the facts.”
An insurance market without many options is another problem, according to Cunningham.
“We always view affordability as a symptom of a lack of availability, meaning that you need to have more competition in the market," he said. "Currently our legal structure has insurers shying away from investing their dollars in Louisiana, and we have a number of outliers, which make it difficult for insurers to, in fact, want to invest their money. Insurers want to invest their money in areas where they actually understand the laws and understand the impact of those laws.”
Cunningham says CCS has been actively working to change the way trials by jury work in Louisiana.
"We’ve been trying to deal with the civil justice reform issues for a number of years now," he said. "The last couple of years, we have filed a jury trial threshold bill... . We’ll probably bring it up again this year also. It’s just that the legislative environment has not allowed that to happen yet.”
Ironically, the argument against lowering the jury trial threshold centers around cost.
“Judges will come in and explain, or at least argue, that lowering jury trial threshold would impact a court’s ability to hear as many cases as they should be because it’s costly," Cunningham said. "They say it will slow down court proceedings all together if you do that and adversely impact how quickly people actually have suits heard."
Cunningham believes the best way to fix the issue of incredibly high auto insurance rates is simple.
“Lower the jury trial threshold to at least an average of what’s available in most states," he said. "We believe that jurors in Louisiana would have a better opportunity to at least have your case heard, in this case by a jury of your peers, who may be less generous than certain judges in this state.”