LAFAYETTE PARISH, LA — Governor Jeff Landry has unveiled a set of significant reforms aimed at addressing Louisiana’s persistently high auto insurance rates, which he described as a “pressing issue” for families across the state. Speaking at a press conference on Wednesday, Landry emphasized the need for a “balanced approach” to auto insurance reform, one that would hold both insurance companies and personal injury lawyers accountable for driving up costs.
In his remarks, Landry noted that while Louisiana has made efforts in the past to regulate the insurance industry, rates remain stubbornly high, with residents continuing to pay more than the national average. According to the governor, despite efforts to regulate the market, profits for insurance companies have continued to rise, while many Louisiana families struggle to keep up with the financial burden.
“The profits continue to go up while the amount in our citizens’ pockets go down,” Landry said, adding that rising premiums are impacting family budgets statewide.
Landry pointed to data indicating that Louisiana’s crash rates are in line with the national average, yet the state still has some of the highest insurance premiums in the country. Of particular concern, he said, was the state’s rate of minor injury claims, which is more than double the national average.
“The only outlier in the numbers is minor injury claims—under which Louisiana is double the national average,” Landry explained. “So when you look at the data, you say that is the problem. We should focus on the problem.”
As part of his plan, Landry proposed expanding the powers of Louisiana’s Insurance Commissioner to better regulate the insurance industry. He also called for new laws to curb the influence of personal injury lawyers, who, according to the governor, contribute to excessive claims and advertising costs that ultimately drive up premiums. Landry suggested that insurance companies should not be allowed to pass the cost of lawyer advertisements onto their customers.
While Landry’s proposals have sparked attention, some industry experts have voiced concerns about the potential consequences of the reforms. Armond Schwing, owner of Schwing Insurance Agency, argued that the insurance companies are not solely to blame for high rates in Louisiana.
“The truth of the matter is, claims costs in Louisiana are 200 percent higher than neighboring states,” Schwing said. “We have two times the national average of injury claims in Louisiana. We are 200 percent more likely to sue in Louisiana, and injury claims cost 59 percent higher.”
Schwing cautioned that Landry’s proposed reforms could have unintended consequences, potentially leading to higher rates in the long run. He expressed concern that efforts to curb insurance company practices could lead to fewer coverage options or greater financial strain on customers.
“Anything that hurts the insurance companies, in the end, could hurt the customers. The proposals could lead to higher rates or even less competition in the marketplace,” Schwing warned.
Tim Temple, Louisiana’s Insurance Commissioner, is expected to address the governor’s proposals during a press conference on Thursday. Temple’s comments are anticipated to provide further insight into the potential implications of the reforms.
As the debate over auto insurance rates continues, it remains to be seen whether Governor Landry’s call for change will lead to lasting reforms that benefit both Louisiana consumers and the insurance industry.