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Monday, March 19th, 2024
Baton Rouge, Louisiana


Throughout Louisiana, it’s common knowledge that the Bayou State has the highest insurance rates in the country when it comes to ensuring both homes and automobiles. This is not new news. This current unworkable insurance market has been the same old, same old for a number of years. So can anything be done to curtail the outrageous amount of money that the average insurance policyholder pays? Or will these folks just be stuck in a deepening pothole of unaffordability?

Since I served as the state’s insurance commissioner for 12 years when insurance rates were on average the same as the rest of the south, I know a little bit about what works and what doesn’t. So lend me your ears, dear reader, as I bring you, good news and bad news.

First the good news. Louisiana has an elected insurance commissioner, but his policies need the support of the governor. Fortunately for incumbent insurance commissioner Tim Temple, he looks to have the active support of newly elected governor Jeff Landry. In years past, recent governors punted on any insurance involvement. They just referred any insurance questions to the insurance commissioner. The governor can make a big difference if he has the desire.

I was fortunate when I served in office to have the full support of Governors Edwards, Foster and Roemer. Each of these chief executives supported and signed off on my program whenever I brought specifics to them. The proof was in the pudding, as rates stayed in the middle of the pack of states all over the nation.

Here is the bad news for Louisiana policyholders. The cost of insurance will undoubtedly go up, not just in Louisiana, but for policyholders in states all over the nation. There are three main reasons. First of all, the inflationary spiral has affected products across the spectrum. It just costs more to buy a car today. Salaries and materials have taken a leap just like they have for the cost of food at the supermarket and many other retail products.
Secondly, car repairs cost a lot more after an accident. Twenty per cent more from just a few years back according to a number of analysts. So, as these repair costs go up, insurance companies pass along such increases to policyholders.

Third, drivers are opting to spend more on the cars they buy. Many drivers today want a more expensive car with more electronics, plusher interiors, and more bells and whistles. Bigger SUVs are all the rage, and these larger vehicles just cost a lot more. And bigger more expensive automobiles cost more to insure.

Another factor concerning cars across the country involve how newer automobile models keep track on your driving. These recent cars are called “smart phones with wheels,” as they tell your insurance company when you drive, how far you drive, how fast you drive, and any violations you may have. All this information goes in a “LexisNexis report” that can be obtained by your insurance company. So whether you like it or not, your newer vehicle passes on all your driving habits. And insurance companies use all this information to determine what rate they charge you.

So yes, the governor, the insurance commissioner and the legislature have put finding ways to reduce the cost of insurance on the front burner of issues they are considering. But they are stuck with what’s happening not just in Louisiana, but in other states all across the country.

It’s unfortunate, no it’s a shame, that’s the legislature did not take much more aggressive action in recent years. There are a number of solutions I have outlined in past columns that could have brought about reductions for policyholders. There are new laws needed and changes in policy that I will outline the future columns. But we have to be realistic. What happens across the nation has a direct impact on the cost of insurance right here in Louisiana.

Peace and Justice

Jim Brown

Jim Brown’s syndicated column appears each week in numerous newspapers throughout the nation and on websites worldwide. You can read all his past columns and see continuing updates at http://www.jimbrownusa.com. You can also listen to his weekly podcast at www.datelinelouisiana.com.

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