Mark Ballard’s opinion piece on proposed tort changes was wrong on the facts and wrong in his conclusion.
Ballard failed to present the most important facts: Louisiana policyholders file twice as many bodily injury claims as the national average and claim 67% higher damages than the national average. This is the reason our auto insurance premiums are some of the highest in the nation.
But why? Are we more fragile than other Americans? No. Does the Louisiana legal system encourage more insurance claims than other states? Yes.
The “tort reforms” in question are all changes to bring Louisiana laws, which are significantly different from other states, into line with the rest of the country. If we want to pay lower premiums like other states, we need laws like other states.
Ballard claims the actuarial report conducted on the proposed tort reforms “reviewed each of the points in the omnibus bill and found no cost savings at all.” The report analyzed 10 possible reforms. Savings on various reforms ranged from none to 0.5% to 5%, but many of the reforms could not be priced because “there is no reliable historical experience to quantify the size of the savings.” The report did not say that there would be no cost savings at all.
Ballard also blames the high cost of auto insurance on uninsured and underinsured motorists. The primary cause of high insurance premiums in Louisiana is bodily injury liability premiums, which are not affected by uninsured/underinsured motorists.
Ballard points to one statement out of context by an insurance lobbyist that medical, vehicle and wage costs continue to go up and put upward pressure on automobile insurance premiums as a “confession” that premiums cannot be reduced. Wrong again. Insurance premiums will continue to go up, along with all other costs, over time. But we can bring Louisiana automobile premiums in line with other states and save Louisiana policyholders significant premium dollars by bringing our legal system into line with other states.
As an insurance agent, I can tell you that Louisiana is in an automobile insurance crisis. Many insurance companies refuse to do business in our state. Businesses with high-risk automobile fleets cannot get insurance, and all businesses are paying significantly higher premiums than their competitors in other states. Some businesses have been forced to cut back, shut down or move to other states. Many families can’t afford to pay for the outrageous cost of automobile insurance in Louisiana and still buy groceries. That is one reason for uninsured/underinsured motorists.
If we want to reduce auto premiums, we must have “tort reform” to bring our laws into line with other states and attract more insurance companies to Louisiana to compete for our business. Thankfully, many Louisiana legislators understand the need for reform.