This article originally appeared in Louisiana Record.
BATON ROUGE - New opportunities could bring the insurance market in Louisiana more in line with the norms in other states, according to lobbyist Kevin Cunningham of Southern Strategy Group.
“We have not had significant tort reform in Louisiana since 1996. The playing field needs to be rebalanced,” Cunningham says.
The flag bearer for auto insurance reform, Rep. Kirk Talbot R-River Ridge, will be back in the legislature this spring, pushing for fixes that would ease costs that insurance companies blame for Louisiana’s rate policies.
With the election of so many pro tort reform candidates in the elections last fall, Cunningham said he is optimistic that 2020 could be the year that Talbot's insurance reform legislation is finally passed.
Rep. Sherman Mack R-Albany, one of the leading contenders to be the next speaker of the House in Louisiana, promised to help Talbot get the key components of his tort reform package advanced this year in several individual bills that he hopes will be easier to pass than Talbott’s big omnibus bill from last year.
One of Talbot’s important goals for the insurance industry is extending Louisiana’s one year statute of limitations period for filing vehicle accident lawsuits to two years. Talbott believes that if companies had two years to work out a claim, more claims would be settled without filing costly lawsuits.
Another of Talbot’s goals for the insurance industry is whittling down Louisiana’s $50,000 threshold for jury trials--a threshold that is much higher than that in many states. A more reasonable threshold is $5,000 which Talbot proposed in his 2019 legislation, Cunningham says.
City courts, which can’t hold jury trials, now handle most car accident cases where damages are under $50,000.
The $50,000 threshold encourages settlements just under the threshold in order to keep the trials in the city courts, Cunningham says. He believes juries would make more realistic settlements that are in line with actual medical costs of injured parties. If more people could request jury trials rather than trial by judge, Cunningham believes the costs of settlements would go down.
One obstacle that lowering the threshold faces is the crowded court dockets in state district courts. In 2019, some legislators refused to support lowering the $50,000 threshold because they did not want to overload state district courts, where dockets are already crowded, with car wreck cases.
Will significant tort reform mean lower insurance rates for Louisiana drivers? Cunningham hopes that eventually consumers will feel some relief. However, he says, rapidly rising medical costs are a critical factor that affect vehicle insurance rates.
No matter what happens with tort reform, expensive medical care will continue to force insurance companies to pass on their higher costs to consumer with high rates, he said.