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Poor Legal Climate Leads to Higher Auto Insurance Rates

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Lower jury trial threshold could help bring rates down

Louisiana has once again earned the dubious distinction of having the most expensive auto insurance rates in the country.

A recent USA Today article highlighted the rankings compiled by Insure.com, which put Louisiana in the No. 1 spot for the third year in a row. Amy Danise, editorial director of Insure.com is quoted as saying, “Louisiana can’t catch a break. It is consistently at the top of our rankings.”

Based on annual premiums for more than 750 vehicles from the 2013 model year, Louisianians pay an average of $2,699/ year for car insurance.  That’s 2.5 times more than the amount citizens pay in Maine, which is the least expensive state for car insurance.

The experts say that Louisiana’s judicial system may be to blame for the high rates (this comes as no surprise to those of us who are familiar with the state’s legal system). One problem most often cited is Louisiana’s $50,000 jury trial threshold.  Because of this unique state law, lawsuits involving claims under $50,000 go before judges instead of juries.

In a recent analysis of civil jury trial threshold limits for all 50 states, LLAW found that the vast majority of states have no threshold for civil jury trials, and among the 14 states that do, Louisiana’s threshold is, by far, the highest in the nation. At $50,000, Louisiana’s jury trial threshold is roughly more than 28 times the national average of $1,742.40.

The practical impact of this is that it forces many auto insurance cases before a single elected judge, who determines fault and sets awards, as opposed to allowing the plaintiff or the defendant the right to request a trial before a 12-person jury.

This takes citizens out of the process, puts more power into the hands of our elected judges, and it makes us stand out like a sore thumb when auto insurers are calculating rates.

Louisiana’s excessive $50,000 threshold serves as yet another example of how Louisiana law is far out of alignment with most other states, and it contributes to our state’s growing negative reputation. On the most basic level, it simply raises everyone’s cost of operating a car in Louisiana. Lawmakers should correct this law and bring Louisiana’s jury trial threshold back into alignment with the vast majority of states. It may actually help to bring down rates—after all this is one list where we do NOT want to stay on top!

Louisiana Lawsuit Abuse Watch is a non-partisan, non-profit citizens’ watchdog group dedicated to raising awareness about the negative impact of lawsuit abuse and its costs to Louisiana workers, consumers, taxpayers and small businesses.  Learn more at www.llaw.org.

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