If you've heard it once you've heard it a thousand times — “My car insurance rates are killing me.”
That's a prevailing sentiment throughout Louisiana and appears to be the No. 1 topic on the minds of lawmakers heading into this legislative session that started Monday.
This is the first in a three-part series on tort reform, which is thought to be the key in getting auto insurance rates lowered. Part one defines the program and features drivers struggling to pay high premiums.
The Louisiana Association of Business and Industry is one of the strongest proponents of tort reform in the state
“This auto insurance, vehicle insurance crisis— is literally burning out of control, right now,” said Stephen Waguespack, LABI president.
In a nutshell, that sums up the problem surrounding tort reform in Louisiana — unlivable auto insurance rates.
Numbers show Louisiana's car insurance is 58 percent higher than the national average, with an average premium of about $2,300 per vehicle which is the second highest in the nation.
“When we pay the second highest auto insurance rates in the country, it's not by accident. It's not because we're the only state that has texting and driving … or bad roads. It's because we have a flawed legal climate that's been broken for decades,” Waguespack said.
“I think we've done that through legislation and creating a system that's been labeled a judicial hellhole in this country,” said sate Rep. Thomas Pressly (R-Shreveport).
When it's all said and done LABI concludes tort lawsuits cost every household in Louisiana more than $4,000 a year. And the upcoming legislative session is the time to set things right with the state’s legal climate…
“It absolutely beyond any doubt will lower the cost of auto insurance in Louisiana,” said state insurance Commissioner Jim Donelon.
So what needs fixing if you're involved in a wreck?
“This is how the game works,” Waguespack said. “First of all they're going to bring you in front of the judge they want because we have loose venue shopping rules here. We’ve got to get rid of that.”
Louisiana has a high jury trial threshold.
“The highest jury trial threshold other than Louisiana, which is $50,000, is Maryland, which is $15,000,” said Pressly.
Waguespack explains what that means is “the law has set the rules against you. They make it hard for you to bring in a jury in court.”
“There's no question about it— the most important is the jury threshold,” Donelon said.
But there are several more things — most agree — need to be addressed.
“You can't talk about whether insurance paid the bills. You can't talk about whether a seat belt was used. That's all put in place by the trial lawyers over the years to make it harder for you to have the case you want, the evidence you want, in front of the jury you want,” Waguespack said.
“We have a one-year prescriptive period. Most states have a higher prescriptive period, meaning they have longer to decide to sue,” Pressly said. “In Louisiana we have a collateral source rule.”
Which in a lawsuit means plaintiffs can virtually double dip.
“Now, the jury doesn't even get to see or the judge what is actually paid. All they see is what is billed so it inflates costs, which can cause premiums to go up,” said state Sen. Kirk Talbot (R-Metairie).
Last year, as a state representative, Talbot sponsored House Bill 372 calling for tort reform. It got shot down in a Senate Judiciary Committee, which featured former legislators Ryan Gatti and John Milkovich.
“Those of you in the Shreveport area saw it cost two of your state senators their seats as a result of their opposition to tort reform,” Donelon said.
Talbot's in the Senate for this new session and still going after tort reform in House Bill 9. There's one more main area he's targeting.
“Direct action. We're one of only three states where you name the insurance company in the lawsuit. We want to take that back,” Talbot said.
Cleveland Auzene is the owner of Auzene Transportation, established in 2016 in Shreveport. Auzene provided critical medical transportation for isolated, elderly patients. He had to stop operations because his auto insurance rates were too high.
“The people of state want this issue fixed — and we’ve got to fix it this year,” Waguespack said.
Louisiana's loggers and truckers have been hit hard and certainly agree.
“Over the past two to three years we have seen our insurance premiums double, triple,” said Timberland Services owner Chad Still. “Three years ago an average premium for a logging truck was $5-6,000. Now its anywhere from $9-10,000. For new businesses it’s $20-25,000.”
Still and his business partner, Jody Woodard, see the problem from a unique perspective. In addition to logging and trucking, they own Pace Insurance Managers, and say at best there are four companies that will write logging trucks in Louisiana and the rates are unaffordable.
“We have talked to people across the nation, across the South, that write in Texas and Arkansas and Mississippi and begged them to come in and do a pilot program. When you say Louisiana they basically laugh in your face (and) say, ‘We're not coming to Louisiana,’” said Woodard, Pace Insurance Managers president.
Donelon said his task as commissioner is to make insurance affordable and available.
And that is certainly not an easy task.
Now that the problem has been defined, in part two of the series KTBS will look at some people who've become popular and easy scapegoats for tort reform: Louisiana's billboard attorneys.