NEW ORLEANS (WVUE)—Louisiana has the unenviable distinction of having the highest auto insurance rates in the country, and state lawmakers are working to find solutions.
Kevin Dykes filled up his vehicle at a gas station in New Orleans. He said he only carries liability insurance on his four vehicles because full coverage would strain his budget.
“I just pay liability,” said Dykes.”It’ll be way higher, so that’s all I can get right now, so that’s all I can afford.”
Veteran insurance agent Dan Burghardt said he hears complaints from customers about the cost of auto insurance.
“Anybody ever comes and moves in here from out of state they get sticker shock,” said Burghardt. “This is an economic crisis. You know, when rates get this high.”
So, five legislative committees are meeting regularly to focus on the problem amid talk of a possible special session next year on auto insurance.
Sen. Kirk Talbot, R-River Ridge, is the Senate Insurance Committee chairman.
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“We’re going to meet every month until probably until session. And I would imagine that a package of bills will be forthcoming,” Talbot said.
He said they are taking a broad approach in looking at possible causes of Louisiana being an outlier in auto insurance rates.
“And we are kind of starting from scratch with a 30,000-foot view and looking at everything. We’re looking at billing, we’re looking at fraud, we’re looking at the litigation environment,” said Talbot. “The question we’re trying to answer is, we all know that we’re the highest rates in the country.
Last week, MarketWatch.com listed the states with the highest full-coverage car insurance rates.
Louisiana topped the list followed by New York, Michigan, Pennsylvania, and Nevada.
“We hear from constituents every day on the commercial and private level on how the rates are and we know they’re high, and we’re just, you know, we’re not giving up on this. It’s too important,” Talbot stated.
A spokesman for Insurance Commissioner Tim Temple said Temple favors having a special session to address the high cost of auto insurance as soon as possible.”
Meanwhile, Talbot and others think that more transparency regarding medical bills and personal injury cases would help the situation.
“We have right now, the only bill that you can submit that’s admissible in court is the billed amount, which is, as we heard testimony two weeks ago, a dollar amount that no one is ever responsible for,” said Talbot.
Further, he said, “Yet we’re facing awards on an inflated amount that no one is ever responsible for. So, I think the logical conclusion is that is contributing to the fact that we have higher payouts for medical injuries than other states.”
Burghardt also weighed in on that point.
“So something’s happening with that aspect of it that’s contributing to the reason why Louisiana has the highest rates in the country,” he said.
He added that newer vehicles have much more technology, making them more expensive to repair when damaged in wrecks.
“The cost of labor, the cost of repairs, the cars are being made with onboard computers that are running up, for safety reasons,” said Burghardt.
He said that people who drive safely may want to consider allowing their insurers to track their driving to get discounts.
“The better drivers to get the big discounts,” said Burghardt.
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