Louisiana motorists seem destined to continue paying the second highest premiums for auto insurance in the nation. A state Senate committee Tuesday killed two seat belt measures and sent a major auto insurance reform bill to the Legislative Fiscal Office for what appears to be an impossible task.
Rep. Kirk Talbot, a Republican businessman from River Ridge, is author of House Bill 372, the reform measure. The deck definitely seemed stacked against Talbot with six attorneys on the seven-member Senate Judiciary A Committee that heard his bill. The House earlier passed the bill with a 69-30 vote.
The average auto premiums in Louisiana are $2,298 annually, according to, compared to the national average of $1,457. Michigan is first at $2,611. Florida is third at $2,219. Talbot said Louisiana premiums are unaffordable for many lowincome citizens.
The most objectionable feature in Talbot’s bill, at least for many attorneys and judges, is a plan to reduce the jury threshold from $50,000 to $5,000. Judges now decide damage claims less than $50,000.
Louisiana has the nation’s highest jury threshold. Talbot said Maryland is No. 2 at $15,000 and North Carolina is No. 3 at $4,500. He said 36 states have a zero threshold.
State trial judges say the change will clog the courts. A spokesman said a judge can handle one of these cases in a day, but juries usually need three days.
Sen. John Milkovich, D-Shreveport, asked Talbot if there were any guarantees that auto insurance rates would go down. Talbot said there is a mandatory rate review, and companies would be required to reduce their rates.
Talbot’s measure also increases the time for filing a damage suit from one to two years.
Rep. Patrick Connick, a Marrero Republican and an attorney, said, “I think that’s one of the main causes why this state is called the judicial hellhole because we have to file suit instead of working it out over a two-year period when there are damages.”
Milkovich said the legislation is not a transparency bill because multi-million dollar insurance companies can’t be named in a lawsuit. Talbot said that isn’t allowed in other states because it is prejudicial to the companies. However, he said the insurance companies still have to pay the damages.
Asked about insurance company profits, Talbot said nationally they are 9 percent but only 7.2 percent in Louisiana.
Insurance and business interests that support Talbot’s bill say there is no proof that the courts will be jammed up. That didn’t’ bother Sen. Jay Luneau, D-Alexandria, and a member of the committee.
Luneau made the motion to delay Talbot’s bill for a week by sending it to economists at the fiscal office to determine what clogging the courts would cost.
Talbot asked how you can come up with the cost when you don’t really know if the courts will be clogged and, if they are, by how much? Luneau said the fiscal office “is not always spot on,” but they could do it.
“If you want to kill the bill, just kill it,” Talbot said.
Sen. Jack Donahue, R-Mandeville, and the only non-lawyer on the committee, said, “Everybody understands what’s going on.” He said it is simply a delaying tactic and because half of the legislative session is already over “it would go into the trash.” Donahue offered an amendment to strip the undesirable jury threshold language from the bill, but the committee rejected the idea.
No one can say for sure that Talbot’s bill is the answer to high auto insurance rates, but it does aim to reduce the influence lawsuits have on costs. There is no other way to determine what effect those suits have unless the jury threshold is lowered.
Jim Donelon, state commissioner of insurance, has said distracted driving, more traveling because of cheaper gasoline prices, poor road conditions and expensive auto repairs are also contributing factors to high insurance costs.
Donelon sponsored an auto insurance reform bill when he was a state representative. It became Act 1476 of 1997. Two features in the bill were popular.
One said an uninsured motorist who is the victim of an accident loses the right to sue for the first $10,000 in medical bills and the first $10,000 in property damage. If he was awarded $12,000, for example, he would only get $2,000. The other popular feature called for impoundment of vehicles that were operating on the road without insurance.
Part of a column I wrote in June of 1997 about that bill is worth repeating today because it’s still true when you talk about high auto insurance premiums.
“The people of this state, who pay the ninth highest auto insurance premiums in the country, are last in line for a rate break,” I said in 1997. “The insurance industry and trial lawyers always get to the table first.”
Not much has changed, but, unfortunately, we have gone from ninth to second place in premium costs.