New state law increases cost of buying auto insurance _lowres

Advocate staff photo by HILARY SCHEINUK -- North and southbound traffic on Bluebonnet backs up at 5:45pm, Thursday, July 30, 2015, in Baton Rouge.

A task force has been set up by the Department of Insurance to address Louisiana’s high auto insurance rates and to make recommendations to lower consumer premiums.

The Louisiana High Auto Rates Task Force is made up of legislators and representatives from insurance companies, the trucking industry and trial lawyers. It was set up by a bill the Legislature passed earlier this year.

“High auto insurance rates have plagued Louisiana families for years, and while we’ve come up with some Band-Aids, we haven’t seen any silver bullet solutions,” said Insurance Commissioner Jim Donelon, who appointed the members of the task force. “I’m hopeful that recommendations made by this task force will be successful where previous efforts have failed.”

Rep. Kirk Talbot, R-River Ridge, who chairs the task force, said the cost of auto insurance can be a heavy burden on struggling families. “We owe it to Louisiana citizens to try to make insurance in this state affordable,” he said.

According to Insure.com, Louisiana has the second-highest auto insurance rates in the country. The average premium in the state was $1,921 in 2017, well above the national average of $1,318. Only Michigan had higher rates, an average $2,394. Insure noted that in 2010, 2012 and 2103, Louisiana had the highest auto insurance rates in the country.

Donelon told Insure that 14 percent of Louisiana drivers don’t have auto insurance and about 40 percent carry only the minimum level of coverage. Because so many people have only minimum coverage, Donelon notes that people who do have coverage end up subsidizing the costs of accidents involving drivers who don’t have enough insurance.

There are some signs auto insurance rates are stabilizing. State Farm, Louisiana’s largest auto insurer, has asked for two rate decreases this year: a 2.9 percent drop for customers renewing policies this month and a 1.8 percent decrease for policies that will renew in September. And Louisiana Farm Bureau, which hiked rates by 14.2 percent in 2017, requested a narrower 7.1 percent increase this year.

Other members of the task force include Sen. John Smith, R-Leesville, who serves as vice chairman; Sen. Wesley Bishop, D-New Orleans; Rich Piazza from the Louisiana Department of Insurance and representatives from each of the following: Property Casualty Insurers Association of America; American Insurance Association; National Association of Mutual Insurance Companies; Professional Insurance Agents of Louisiana; Louisiana Association for Justice; and the Louisiana Motor Transport Association.

Follow Timothy Boone on Twitter, @TCB_TheAdvocate.