Louisiana has the second highest auto insurance rates in the nation, with only Michigan having higher rates, yet business corporations fear that the high rates speak not to the danger of Louisiana's roads but the litigious atmosphere in the state.
According to a posting on kalb.com, Louisiana Insurance Commissioner Jim Donelon believes that the litigation culture in Louisiana is the main reason for high rates, as does Lana Venable of Louisiana Lawsuit Abuse Watch, who pointed out that auto accidents are on par with the national average in Louisiana.
Pelican Institute for Public Policy CEO Daniel Erspamer recently told the Louisiana Record that he believes that the tendency to sue for minor accidents will continue to cause high rates unless action is taken to change the trend.
"Louisianans need to understand the many drawbacks to our state's sue-happy legal environment," Erspamer said. "In 2017, Louisiana had the highest bodily injury liability claim frequency in the country, and Louisiana claimants were more likely to file lawsuits than other states."
Though many drivers in other states opt to file accident claims with their insurance companies, Louisiana's lawsuit climate encourages drivers to turn to personal injury lawyers, and pursuing legal action in court carries a high price, which translates to higher insurance rates for the rest of drivers. The fact that Louisiana has the second highest auto insurance rates also testifies to the scale of lawsuits that are filed over seemingly straightforward auto collisions.
"Lawsuit abuse is certainly a factor in Louisiana's skyrocketing car insurance rates, and worse, our harsh legal climate is directly discouraging the growth of jobs and opportunity in our state while overburdening working families," Erspamer said.
But change may be in the wind, as Donelon has allowed State Farm to make rate decreases for private passenger vehicle coverage, which should lower rates by 3.2 percent for over one million policyholders in Louisiana in 2019, the kalb.com posting said.