Farmers’ Insurance Exchange is returning to the Louisiana insurance market this week and will issue auto insurance policies after a seven-year absence from doing business in the state, the company said.
The Louisiana Association of Business and Industry (LABI) welcomed Farmers’ return and expressed hope that other insurers would follow suit in the wake of improvements to Louisiana’s legal climate. LABI has also sent out a second round of correspondence to 1,100 insurers around the nation, inviting them to return to the state and pointing to a new series of positive legal changes that came with the passage of the Civil Justice Reform Act of 2020.
“With many of those reforms being implemented, we encourage you to re-evaluate, reconsider and rethink doing business here,” the letter from LABI and others in its Legal Reform Coalition states.
In response to a query from the Louisiana Record, however, Farmers Insurance didn’t mention the civil litigation reforms and instead indicated the company’s renewed interest in Louisiana came as a result of strong consumer demand.
“Since 2011, Farmers has been very deliberate about growing our national presence, particularly expanding and establishing ourselves on the East Coast and parts of the South,” Marika Bastrmajian, a Farmers spokeswoman, said in an email. “Our recognition amongst consumers continues to grow, with our advertising resonating with consumers and increasing demand for our presence in more markets, including Louisiana.”
The company noted that on Saturday, the company will begin delivering personalized and “digital-first” insurance services for consumers as it re-enters the state’s insurance market.
LABI emphasized that increasing competition for insurers should help to lower auto insurance rates for Louisiana drivers.
“LABI and our coalition partners look forward to working with Commissioner (Jim) Donelon and his team to help recruit even more insurers to Louisiana,” LABI President and CEO Stephen Waguespack said in a prepared statement.
The Civil Justice Reform Act, which was enacted in August, addressed four issues that the law’s supporters say will make the state’s civil litigation system more reasonable and less onerous for businesses such as insurers.
The reform law reduces the minimum civil claim threshold to request a jury trial from $50,000 to $10,000, limiting trial attorneys’ ability to game the system, supporters say. The law also allows defendants to introduce evidence showing a plaintiff in an auto-related lawsuit did not wear a safety belt, and it also generally defines plaintiffs’ medical expenses as the amount paid by the plaintiff’s insurer, as opposed to the amount billed.
In addition, plaintiffs’ attorneys are now restricted during jury trials from introducing evidence about a defendant’s auto insurance policy, a practice that had been used to increase jury damages awards, according to supporters of the new law.