Louisiana has long been known for its litigious culture, and high auto insurance rates are one result, the Louisiana Lawsuit Abuse Watch said in a recent interview.
“Louisiana has long been among the most expensive states for auto insurance, leading to a real insurance crisis for hard-working taxpayers,” Lana Venable, executive director of LLAW, told the Louisiana Record.
Republican Jim Donelon, the current Louisiana insurance commissioner, recently was interviewed by Insurance Journal about the crisis and spoke about his office's two primary responsibilities.
“The first is our mission, which is to make insurance affordable and available for insurance consumers throughout the state. The second is to protect consumers in their dealings with their insurers,” Donelon said.
Venable said Donelon’s assessment of rising commercial auto insurance rates is on target and must be dealt with for the health of the state's economy.
“From the trucking industry to school bus drivers – it has become increasingly difficult for these operators just to stay in business. The services they provide are critical to Louisiana families and the state’s economy,” Venable said.
The reason that industries are struggling to stay in business is closely linked to the state’s lawsuit climate, among the worst in the country, which is pushing many companies to relocate away from Louisiana, she said.
“A recently released study by the U.S. Chamber Institute for Legal Reform polled more than 1,300 leading national business executives, who ranked Louisiana’s lawsuit climate second-worst in the country,” Venable said. “Clearly, there is a lot of work to be done.”
If re-elected, Donelon said he hopes to institute reform that would lower the high auto premium tax.
Donelon will face fellow Republican state Rep. Tim Temple (R-Baton Rouge) in the Oct. 12 election.
Temple has said he decided to challenge Donelon because commercial auto insurance rates continue to escalate. He said that if he is elected to head up the Louisiana Department of Insurance, he can do more than Donelon to stop the rising costs.
One way Temple believes he can make a difference is by trying to bring other commercial insurance companies into Louisiana, he said. Temple has been in the insurance business for 24 years. He is self-financing his campaign.
Venable said that it is "crucial that efforts to reform the civil justice system continue, regardless of the outcome of Louisiana’s upcoming elections."
Editor's note: The Louisiana Record is owned by the U.S. Chamber Institute for Legal Reform.