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What is big insurance hiding?

Apparently the thought of insurance companies being investigated for fraud sent a scare through the insurance industry.

HB 281 by Rep. Ray Garofalo empowers the Louisiana Automobile Theft and Insurance Fraud Prevention Authority to combat property insurance fraud, worker's compensation fraud, and health insurance fraud.

Jimmy Ordeneaux, a lobbyist with Louisiana Farm Bureau Insurance, put in a red card and spoke in opposition to HB 281. Ordeneaux said Farm Bureau would be "fine" with HB 281 "if it were tailored to insured fraud or policyholder fraud" but that they are worried the bill provides "more oversight" for insurance companies.

We know insurance companies in Louisiana are editing reports from their own field adjusters without their consent to deprive homeowners of the money they need and deserve. Similar schemes in other states have led to insurance company's contractors being successfully prosecuted for fraud.

HB 281 provides a measure of oversight that benefits Louisiana consumers, even though consumer voices are severely lacking in the proposed panel. Farm Bureau's opposition to HB 281 reaffirms the need for that additional oversight.

In fact, it begs the question: What is Farm Bureau hiding?

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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.