Lawmakers seek recommendations to drive down car insurance rates

NEW ORLEANS, LA (WVUE) - Some state lawmakers want Insurance Commissioner Jim Donelon to come up with recommendations on how auto insurance rates can be lowered.

Louisiana has long had bloated rates compared to many other states.

"The main contribution is accident frequency. Accident frequency has doubled in the last couple of years," said independent agent Dan Burghardt, who owns an insurance agency in Metairie.

He said the more drivers on the road, the greater the odds of accidents.

"So when you have more people out on the road you're going to have more accidents, especially if you're going to put a cell phone in the middle of it," said Burghardt.

At the State Capitol Monday, Donelon went before lawmakers on the House Appropriations Committee to discuss the budget proposed for his office for the new fiscal year. Donelon's office generates the bulk of its revenues, and lawmakers had more questions about the state's insurance rates.

"For the last five years rates have gone up in Louisiana for auto," Donelon said.

Donelon said distracted driving helps fuel the high rates.

"What has happened of late is happening in every state in America for three reasons. Number one, distracted driving. Not only is it driving insurance rates up in every state in America, it's killing motorists at record numbers," said Donelon.

Burghardt agrees.

"They can't resist answering the phone, they're on the phone all the time, you see it at traffic lights. You've got to blow the horn to get them to move, so you got distracted, more drivers equals more accidents," Burghardt said.

And Burghardt said another part of the equation is the high-tech equipment in newer vehicles. He said when it becomes damaged the cost of repairs is often significant.

"You've got a lot of safety sensors, cameras to protect and keep people focused. This stuff costs money to fix. Just a sideview mirror can cost $1,500," he said.

But state lawmakers think more should be done to put the brakes on premium hikes.

"I would appreciate an official position if you're willing to take it on what we can do to at least bring ourselves down to the Southern average rather than outrageous rates that we're charging," said Rep. Tony Bacala, R-Prairieville.

"It seems that you generally approve most requests that are submitted. Is that true on auto insurance?" asked Rep. Pat Smith, D-Baton Rouge.

"Outright, yes. Most requests are approved with some alteration by my staff," answered Donelon.

"Do you ever deny any?" continued Smith.

"Outright, yes,I have, I have," said Donelon.

And he said new insurers are not itching to enter the market. Donelon said the level of litigation over auto accidents doesn't help.

Burghardt echoed that.

"And the lawsuits are driving these insurance claims even higher and higher," said Burghardt.

He added that some insurers offer apps to keep track of how their customers drive, and that safe drivers can get large discounts.

Burghardt said he fears a lot of drivers who can no longer afford the rising insurance rates will let coverage lapse. But he said that could be a costly mistake due to hefty reinstatement fees and administrative costs.

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