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New Year, Same Problem

As we enter the new year, Louisiana faces a familiar crisis.

Property insurance rates are skyrocketing, rising 27% between May 2022 and May 2023. Insurance companies universally state prices are going up and coverage is diminishing due to severe storms, the unpredictable nature of these storms, and the increased cost of repairs because of inflation.

While this crisis is driven by natural disasters, Louisiana's problem is man-made. We ignore the fact that big insurance companies want to exploit the crisis to increase their profits, and we continue to allow the insurance industry to dictate our solutions. Louisiana has put the fox in charge of the hen house.

Unfortunately, commissioner Tim Temple's agenda is more of the same. Temple wants to stack the deck more in favor of big insurance at the expense of Louisiana consumers by doing the following:

Weaken or eliminate the three-year rule
Make it harder to hold insurers accountable
Allow big insurance companies to cherry-pick where they write policies
Make it easier for insurers to delay and deny claims
Raise rates more often

These anti-consumer, pro-industry measures will not invite new insurers to write policies in Louisiana because they fail to address the weather-related reasons insurers are weary of Louisiana. Instead, Commissioner Temple's agenda benefits companies already in our state at the expense of Louisiana families and small businesses, leading to significant rate increases, diminished coverage, and making it harder for homeowners to hold their insurers accountable.

Big Insurance continues to rake in billions in profits, and Swiss Re projects these profits will increase in 2024 as a result of higher premiums, strong investment returns, and improved interest rates. We cannot allow insurance companies and industry-friendly officials to exploit natural disasters at the expense of homeowners.

Lower Rates by Mitigating Risks in 2024
Louisiana desperately needs solutions that lower rates and help hold big insurance companies accountable. We must upgrade our housing stock to better withstand hurricanes and mitigate the risk for insurers. We accomplish this goal by investing in and expanding the roof fortification program.

Louisiana families and small businesses cannot afford more industry-backed legislation designed to increase profits and strip consumer rights. Louisiana needs real reforms that lower costs, increase competition, and hold Big Insurance accountable.

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Insurance Industry: "Credit Scores" Among Reasons for Louisiana's Rising Insurance Costs.

By Ben Riggs • 16 Feb, 2024

Insurance Industry: "Credit Scores" Among Reasons for Louisiana's Rising Insurance Costs. A new report shows that auto insurance rates are skyrocketing, rising by 26% across the U.S. On average, Louisiana drivers pay $2,909 annually, roughly 6.53% of their income for auto insurance. Wayne Watley at Watley Insurance Group lists “credit scores” among the reasons for Louisiana’s rising auto insurance costs, including poor roads and uninsured motorists. Mr. Watley goes on to say, “It’s a challenge because we’re not one of the richest states, but we have some of the highest premiums.” He is correct—and the data backs him up. Insurance companies use credit scores to determine insurance rates for policyholders. Louisiana ranks 48th in median household income and 49th in average credit score . According to a recent study , safe drivers in Louisiana with poor credit pay 111% more than safe drivers with excellent credit ($1,505 / $713). Consequently, Louisiana has the second-highest auto insurance rates in the nation, which leads to more uninsured motorists, another primary cause of higher insurance rates. The use of credit scores in rate setting also creates perverse incentive structures that make Louisiana roads less safe. In Louisiana, safe drivers with poor credit pay an average of $905 more than drivers with a DWI and excellent credit ($3,548 / $2,643). Meanwhile, traffic fatalities increased by 21% from 2019 to 2022 in Louisiana, and the fatality rate per 100 million vehicle miles traveled increased by 18%, according to KPLC . Louisiana desperately needs real insurance reforms that lower costs, protect consumers, hold insurers accountable, and make our roads safer.