Rep. Sylvia Elaine Taylor, D-Reserve, left, chats with Sen. Greg Miller, R-Norco, on opening day of the regular legislative session, Monday, March 11, 2024, at the Louisiana State Capitol in Baton Rouge, La.

Why are car insurance rates so high ?

State senators battled over that divisive question Tuesday before a Senate committee. Some pressed the pro-industry view that Louisiana’s laws encourage too many lawsuits and big payouts, while others pushed the trial lawyers’ view that government regulators must force insurance companies to direct some their profits to lower rates.

The packed committee room – with dozens of people declaring support or opposition to each bill – reflected the stakes.

“It’s still the number one issue in my district,” said Rep. Jason DeWitt, R-Alexandria, one of the representatives who presented a bill before the Senate Judiciary A Committee, reflecting the view of many colleagues.

Each side could claim victories Tuesday.

The Senate committee approved three bills sought by insurance and business interests and was poised to pass two more Tuesday night. But the committee took up only a handful of the pro-industry bills that overwhelmingly passed the House, indicating that the others may die from a lack of attention.

The insurance industry and such trade groups as the Louisiana Association for Business and Industry and the Louisiana Motor Transport Association have been fighting the trial lawyers’ lobby for years over how to rein in Louisiana’s insurance rates.

When the House took up and passed 16 bills favored by business interests, the trial lawyers’ advocates put up little opposition.

That changed Tuesday in the Senate, when the Judiciary A Committee heard the House-passed bills.

Sen. Jay Luneau, D-Alexandria, had House members and industry representatives squirming as they tried to answer his pointed questions while testifying in favor of those bills.

“The goal is to reduce lawsuits by taking away people’s rights to sue?” Luneau, a trial attorney, asked DeWitt at one point.

“I’m trying to reduce the number of the people on the road without insurance,” DeWitt replied about his House Bill 434 , which would keep injured uninsured drivers from receiving the first $100,000 of any payout, up from $15,000 under current law.

“How much is it going to lower rates?” Luneau asked DeWitt a bit later.

“It depends on how many bills get across the finish line,” he replied.

Luneau noted that the Legislature in 1996 limited injured drivers without insurance from collecting on the first $15,000 in a claim, then asked how much that reduced rates.

“I don’t know,” DeWitt replied.

“It didn’t reduce rates a penny,” countered Luneau.

Sen. Gary Carter, D-New Orleans, repeatedly pointed out to DeWitt and other pro-industry officials that the measures they supported had no language ensuring the changes would actually lower rates.

“If you look at insurance companies, they’re having record profits,” Carter said.

Will Green, LABI’s president and CEO, told Carter the legislation would lead to fewer lawsuits and fewer payouts, translating into higher insurance company profits. Louisiana’s insurance commissioner would then require the companies to lower rates, he said.

“We can become a more attractive state for carriers and business,” Green said.

The committee passed DeWitt’s bill, House Bill 431 by Rep. Emily Chenevert, R-Baton Rouge, and House Bill 450 by Rep. Michael Melerine, R-Shreveport. Each bill heads to the full Senate for consideration.

Chenevert’s bill would bar drivers responsible for at least 51% of an accident from receiving a damage award to cover their injuries. Under current law, a driver responsible for, say, 51% of the accident can collect a payment equal to 49% of the overall damage award.

Chenevert said 38 other states, including Louisiana’s neighbors, have this law.

Tom Clark, a lobbyist for Allstate, said statistics show the problem lies with Louisiana’s legal system, telling the committee that Louisiana has twice as many injury claims as Alabama even though Alabama has 500,000 more residents.

Paul Spalitta, president and CEO of S&W Foods in Hammond, said he pays $7,000 a year in insurance for a truck in Indiana but $28,000 for an identical one in Louisiana.

“It gives you a sense of how unfair the rates are due to the frivolous lawsuits and outrageous payouts,” Spalitta said.

Brian Katz, a New Orleans trial lawyer who is president of the Louisiana Association for Justice, called Chenevert’s bill “unfair” because it would allow people at fault for up to 50% of an accident to avoid having to pay anything.

It “takes responsibility away from parties that have acted irresponsibility,” Katz said.

As expected, three Democrats voted against the three bills. They were Luneau, Carter and Sen. Sam Jenkins of Shreveport.

Also expected, three Republicans on the committee voted in favor of the bills. They were Sen. Rick Edmonds, R-Baton Rouge; Sen. Beth Mizell, R-Franklinton; and Sen. Alan Seabaugh, R-Shreveport.

In each case, Sen. Greg Miller, R-Norco, the committee chair, cast the deciding vote.

Miller has been under attack by conservatives who say he’s too aligned with trial lawyers.

But while Miller voted three times with business interests, he scheduled on Tuesday only five of the 16 pro-industry bills passed by the House and wouldn’t commit to hearing more of them in the final three weeks of the legislative session.

“We may take up some of them,” Miller said later in an interview.

Insurance Commissioner Tim Temple praised passage of the three bills by the committee but said in an interview, “It’s in the best interests of the people of Louisiana to have all the insurance reform bills that passed the House to be heard in the committee.”

The Senate Insurance Committee plans to hear another contentious bill Wednesday. House Bill 148 by Rep. Jeff Wiley, R-Gonzales, would allow the insurance commissioner to reject “excessive and discriminatory” rate increases without relying on hard data from insurance actuaries.

Temple argues that would discourage insurance companies from operating in Louisiana. Gov. Jeff Landry has been lobbying hard for the bill and has said publicly that he would blame Temple for high insurance rates if it passes, and they don’t drop.

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