New U.S. Senate Report Shines Light on Louisiana's Insurance Crisis.

Big Insurance's Louisiana Boondoggle. Former Missouri State Insurance Commissioner Jay Angoff recently testified before the Louisiana Senate Judiciary A Committee. The former commissioner reviewed data provided by insurance companies to the National Association of Insurance Commissioners (NAIC). The hearing and most of the data presented focused on personal and commercial auto insurance. A key takeaway on personal auto from the NAIC data was that Louisiana's insurance market is competitive and profitable. This revelation was particularly interesting because it undercuts Commissioner Tim Temple's analysis of the Louisiana insurance market and his legislative agenda. Commissioner Temple has repeatedly stated: "If we get more companies in Louisiana, then that helps solve issue number one which is availability. Once you have more companies in Louisiana, that helps work on problem number two which is affordability.” Yet, the data presented by former Commissioner Angoff painted an entirely different picture.

Expert, Former Commissioner Testifies on Louisiana's Insurance Market. Former Missouri State Insurance Commissioner Jay Angoff recently testified before the Louisiana Senate Judiciary A Committee. The former commissioner reviewed Louisiana’s insurance regulations, other states’ laws, and information provided by insurance companies to the National Association of Insurance Commissioners (NAIC). Mr. Angoff provided a detailed, data-filled report on Louisiana's insurance market. He explained how lax regulations that make Louisiana an extreme outlier contribute to high insurance rates. Additionally, he discussed the high returns insurers are seeing on policies in Louisiana and the massive profits rolling in on investments on their $1 trillion surplus. Below are highlights from the hearing and a copy of Mr. Angoff's complete report and testimony.

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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.

Louisiana Insurance News

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Safe drivers with bad credit are penalized in Louisiana, leading to higher auto insurance rates.