Temple relies on data to explain La.’s high car insurance rates. to explain, but the plaintiffs’ lawyers do not believe in it

LOUISIANA (Louisiana reliever– As state leaders search for answers to why auto insurance rates are so much higher here than in other states, industry research shows Louisiana has the highest number of personal injury claims and the second-highest number of lawsuits in the country.

Both data points are among the few statistics that include Louisiana as an outlier, and Insurance Commissioner Tim Temple said they are likely among the biggest reasons for the state’s skyrocketing auto insurance premiums.

But attorneys and plaintiffs’ advocates say the numbers, which they note come from the insurance industry, may be flawed and cannot explain the cause of increasingly unaffordable coverage in a state already struggling with poverty.

Although Louisiana is only slightly above the national average when it comes to the frequency of car accidents, the tendency for people to claim they have been injured in those accidents is almost 200% higher than the rest of the country, according to the most recent figures. data on personal injury claims of the National Association of Insurance Commissioners (NAIC).

Additionally, the lawsuit rate, which is defined as the likelihood that auto insurance claims will result in a lawsuit, is more than twice the national average and the second highest in the country after Florida, according to estimates released in October by the Insurance Research Council (IRC), an industry-backed group.

In a phone interview last week, Temple said both data points align with much of the recent testimony to the Louisiana Legislature.

For years, car insurance rates in Louisiana were among the highest in the country, by significant margins. There have been several legislative committees monthly meetings since August in a coordinated effort to address the problem. They are expected to meet in December and ultimately vote on legislative solutions next year.

During those meetings, lawmakers listened to researchers, insurance industry representatives, truck drivers, business owners, attorneys and others. Most testified about a legal climate in Louisiana that has made it easy to file personal injury lawsuits for quick monetary settlements that are not always warranted, though some disagree.

State lawmakers have not pressured insurance companies to detail how they calculate their auto premiums, especially regarding how rates change depending on zip code.

If lawmakers knew more about the algorithms used to generate quotes and calculate premiums, they might have a much better idea of ​​how to solve the crisis, said Ben Riggs, executive director of Real Reform Louisiana, an advocacy group for insurance reform that receives funding from personal injury attorneys.

“We talked about everything we could do to lower insurance rates, except for one thing, and that is how the rates are determined,” Riggs said in a telephone interview. “It seems to me that it is impossible to address the sky-high insurance rates without knowing how those rates are determined.”

Temple, who made a career in the insurance industry before being elected to head the Louisiana Department of Insurance last year, said an insurance company’s rate algorithms are considered proprietary and hidden from the public in accordance with state law.

Such laws are common in many states and also apply to industries outside of insurance, with companies claiming they need secrecy to remain competitive. Insurance rate algorithms can vary by company and in some cases developed with artificial intelligence programs or outsourced to external risk management consultants.

Besides data, little information

The insurance industry has been deeply engaged with lawmakers and government officials since hearings at the State Capitol to address the crisis began in August. Few others offer lawmakers relevant research or propose data-driven solutions.

The commissioner said he is not advocating any specific side of the debate and only wants to follow the best available data. Beyond the NAIC and IRC statistics he cited on personal injury claims and lawsuits, lawmakers have struggled to find much else that would make Louisiana earn the nation’s highest auto insurance premiums.

Statistics of the Insurance Institute for Road Safety when it comes to the frequency of car accidents, traffic fatalities, drunk driving, seat belt use and other related points, Louisiana appears to be relatively consistent or only slightly above the national average.

Mississippi, for example, has the highest death rate in traffic in the country with 23.9 deaths per 100,000 inhabitants. That’s significantly higher than Louisiana’s rate of 19.7, yet auto insurance in Mississippi costs almost half as much.

The NAIC and IRC findings could bolster the insurance industry’s arguments for so-called “tort reform” measures that could make it more difficult to file car accident lawsuits, although some continue to dispute the data.

The NAIC is a standard-setting research organization for state insurance regulators across the country. It does not represent insurance companies, so its data generally does not receive the same criticism as the IRC’s data. The insurance industry includes all IRC members, which is why its reports and analyzes often come under criticism from personal injury attorneys and skeptics.

According to the IRCuses the NAIC data on the number of lawsuits opened and the number of claims closed to create statistics on the number of lawsuits.

Prescriptive pressure

Rep. Edmond Jordan, D-Baton Rouge, who also practices personal injury litigation, pointed out that until the Legislature made changes this year, Louisiana long had a one-year deadline from the date of the injury to file a to file a lawsuit. what lawyers call a statute of limitations. Such short notice could essentially force people to quickly file lawsuits to avoid losing their legal rights, and this could cause concentrations in the IRC’s annual litigation data for Louisiana, Jordan said.

“The data is definitely skewed by the prescriptive period,” Jordan said. “Louisiana had a one-year statute of limitations, so of course you get more lawsuits per year than other states.”

Tennessee is the only other state with a prescribed one-year period applicable to car accidents, but the same insurance industry data shows that residents are less likely to file personal injury claims after wrecks than the national average. In most other states, the deadline ranges from two to three years.

Still, Jordan pointed out that lawmakers have passed a variety of different “reform” measures over the years without success. Changes made in 2020 include allowing more car accident cases to be tried before juries and reducing the amount insurance companies must pay out to accident victims.

Supporters said these and other measures would result in lower premiums for drivers through competition as the market would become friendlier to insurers. These cuts have yet to become reality.

“These are shots in the dark hoping they will lower insurance rates,” Jordan said. “We’re doing the things they’ve been talking about for 30 years, and it hasn’t worked at all.”

Doubts about data

Some believe the findings are flawed in other ways. Sen. Royce Duplessis, D-New Orleans, who also practices personal injury law, has repeatedly argued that more evidence is needed to prove a direct link between any of the data points and high insurance rates. Mere correlation does not justify wholesale changes in the law, Duplessis told his colleagues at an Oct. 11 committee meeting.

Temple pointed out that the insurance industry is the only available source for most of the data lawmakers are looking for. So while it may be fair to scrutinize the data and try to verify it, it is unfair and impractical to immediately dismiss everything simply because the statistics come from the insurance industry, he said.

Among the many people who have testified so far, insurance industry representatives, academics and drivers dominate the conversation. For the most part, they are the only ones who have provided personal bills regarding insurance claims and dubious car accident lawsuits, or made data-driven proposals that lawmakers can easily turn into law.

One of these concerns the civil law concept known as a “collateral source,” which prevents defendants from admitting certain types of evidence in court, meaning juries may not receive a full and accurate account of the facts. The rule has allowed plaintiffs to sue over excessive medical bills that they never actually had to pay.

Lawmakers legislation passed Earlier this year, it would have addressed the issue of collateral sources, but Governor Jeff Landry, whose gubernatorial campaign received significant funding from plaintiffs’ attorneys, vetoed the measure.

Another major problem is the Housley presumption, a standard that the Louisiana Supreme Court created for car accidents, medical malpractice and other injury cases through a precedent-setting 1991 case. In a nutshell, it boils down to the fact that courts must assume that a plaintiff’s injuries are the result of an accident if he was in good health before the accident and the symptoms of the injury appeared afterwards.

Housley’s conjecture debate is not a new one before the legislature, but it is unique to Louisiana and has a lower standard of proof than that used in other states, which Temple says makes Louisiana an outlier in another important category within the auto insurance market.

Jordan disagrees, saying he believes some are misinterpreting Housley’s conjecture or overestimating its significance.

Lawmakers passed a bill in 2020 to lift the Housley presumption, but… a veto was issued by the then government. John Bel Edwards, who, like Landry, received the financial support of trial lawyers during his election candidacy.

“We need to rebalance the system in Louisiana,” Temple said. “It is out of balance and in favor of the plaintiffs and the plaintiffs’ attorneys.”

Parliamentary hearings were expected to resume in November, although lawmakers may have their hands full with another call special session on tax matters.

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