If state leaders want to score an election-year win with both the public and the business community, they would find a way to lower Louisiana’s notoriously high auto insurance rates.

That’s easier said, however, than done—especially when dealing with this state’s fractured Legislature. Despite a litany of annual proposals designed to address the problem, little has been accomplished over the years in the way of reducing premiums. Even the state’s most powerful business lobby couldn’t get its signature tort reform package—House Bill 372—passed this year, which it argues is the key to lower auto insurance rates.

Louisiana drivers, meanwhile, are stuck paying the nation’s second-highest auto premiums, making insurance even more unaffordable in an already-poor state. The situation is perhaps worse for businesses with commercial fleets, which are essentially begging for relief from high rates, claiming the problem is at a near crisis level as carriers continue to depart the state’s commercial market.

So why—on an issue almost everyone agrees must be addressed—has nothing been done? Because there are deep disagreements among powerful groups over how the problem should be fixed—if it can be fixed at all.

Business and insurance experts, adamant that Louisiana’s litigious culture is to blame for high rates, have channeled their focus on tort reform measures. But those efforts run up against the formidable plaintiff bar, which argues proposed legal reforms favor insurers and won’t lower rates. Trial attorneys instead are pushing to curb discriminatory pricing, though that too has been unsuccessful.

There are other reasons for high rates both sides agree on, such as distracted driving and poor infrastructure. But proposals put forth this year—a gas tax hike and cell phone ban while driving—that could have tackled those issues were killed in the Legislature, along with tort reform.

In short, lawmakers hunkered down and did nothing.

“Efforts to reform different things have not generally been successful,” says Jeff Albright, CEO of the Independent Insurance Agents & Brokers of Louisiana, which has pushed for tort reform to lower rates. “There’s just no political or legislative will to get it done.”

The state even convened a High Auto Rates Task Force in 2018, requested by the Department of Insurance, to study the issue and recommend solutions. But critics say the group only met three times and focused mostly on the legal system reforms.

“The kindest way to say that is the task force didn’t do its job,” says Baton Rouge attorney Robert Kleinpeter, who served on the task force on behalf of the Louisiana Association for Justice, which represents trial lawyers.

Kleinpeter says the task force should have looked not only at what happens after a car crash that might raise rates, but also what happens before—such as distracted driving or, even further, unfair pricing when insurance policies are purchased. 

But those don’t appear to be areas where Louisiana is wildly out-of-step with the rest of the country, insurance experts say. To bring the state in line with national averages when it comes to auto insurance, they look to the legal system where Louisiana, most notably, stands out.

“We’ve always had the highest claims-to-litigation rates in the nation,” says state Insurance Commissioner Jim Donelon. “It goes back decades with the tort system.”

And while it’s true distracted driving and bad roads can cause more accidents—which do lead to higher rates—Louisiana is just slightly higher than the national average in terms of fatal crashes and property damage claims filed.

Where the Bayou State is most out-of-whack is in its auto lawsuits and bodily injury claims. According to the Insurance Research Council, Louisiana had the highest bodily injury claim frequency in the country in 2017, with 1.75 claims per 100 insured vehicles. The national average was 0.9.

“The bodily injury claims rate is almost double the national average—way out of line with the accident rate,” Albright says. “It’s not because we’re more fragile. But it’s something in the legal system. We’re more likely to file claims.”

Still, despite staggering statistics proving Louisiana is indeed litigious, the proposed tort reform efforts in recent years have struggled to establish sufficient evidence they would lower auto rates, critics say.

“The biggest argument from what I gathered was that it left a bunch of question marks,” says state Sen. Rick Ward of HB 372—this year’s tort reform measure sponsored by Rep. Kirk Talbot to lower auto rates.

The bill died in Senate Judiciary A, which Ward chairs. The Louisiana Association of Business and Industry has tagged the committee as the place “where tort reform goes to die,” as six of its seven members are attorneys.

“It’s undeterminable,” Kleinpeter says of tort reform results. “We’ve been tweaking the legal system for 30 years—yet here we are.”

Kleinpeter decries the fact that proposed reforms always target the legal system but not the insurance companies. He brought in a California expert, Doug Heller, to testify in Senate Judiciary A on discriminatory pricing practices by insurers in which they base rates on arbitrary indicators such as wealth, gender, credit score and education.

For instance, a woman with a high school degree and good driving record is likely to pay higher rates than a man with a master’s degree. There’s also something called a “widow penalty” when a spouse dies and auto rates go up.

A bill in the Senate this year aimed to prohibit insurance providers from using credit reports and gender for rate setting, but it didn’t make it out of the insurance committee.

“We should be charged insurance premiums on how we drive, not who we are,” Kleinpeter says. “Insurance is a product, something we have to buy. The supply needs to be regulated so it’s not unfair.”

Would implementing these regulations impact auto rates across the board? Kleinpeter says yes, citing a study that shows consumer protections and regulations have slowed rate growth in California.   

Donelon disagrees.

“Some people talk about not using gender, age, credit scores—but if we precluded those, everyone who benefits from it, someone else will get the increase,” he says. “There’s no free lunch.”

So where does all this back-and-forth leave Louisiana drivers? Back to where they’ve always been—in the state with the most unaffordable auto insurance in the nation, and no agreed-upon solutions in sight.