Editor’s Note: a guest post from Louisiana Rep. Gabe Firment (R-Pollock) of House District 22, the chairman of the Louisiana House Committee on Insurance.

“It’s not fair!”  This is an exclamation that parents usually hear from their children by the age of 3 or 4, when kids begin to develop a sense of what is right and wrong. As a Christian, I believe that this innate yearning for fairness and justice stems from the “Imago Dei”, the idea that humans bear the image of God and reflect His character and holy attributes.

Throughout Scripture we see the LORD as a just God, proclaiming in Proverbs 11:1 that “A false balance is an abomination to the Lord, but a just weight is his delight.”

This concept of fairness has been at the heart of many important issues the state legislature has debated over the past year – redistricting, criminal justice, education, tax policy – and all of these conversations inevitably turned into a discussion over what was fair and just.

As Chairman of the House Insurance Committee, it is my sincere belief that we need to have a serious conversation about “fairness” when it comes to the high cost of commercial and personal automobile insurance in Louisiana.

Although there are different ideas about how to solve the insurance crisis in our state, we should all be able to agree that it is not fair that Louisiana is the most unaffordable state in the nation for automobile insurance.

Over the past several months the state legislature has held a series of meetings involving multiple committees – including House Insurance – with the sole purpose of identifying the underlying cost drivers of automobile insurance in the state. These committees will likely reconvene in a joint meeting in the next couple of months to formally present their findings prior to the beginning of the next regular legislative session in April.

For me, the biggest takeaway from the meetings thus far is that Louisiana is an outlier in how we resolve disputed automobile insurance claims.  When automobile accidents occur in our state, we are more than twice as likely to file bodily injury claims as the rest of the nation, and we file lawsuits to resolve these claims at a much higher rate than our neighbors in the South and around the country.

These two facts alone – our propensity to file bodily injury claims at a higher rate and to litigate at a higher rate – call into question the fairness of our civil justice system in Louisiana when it comes to settling automobile insurance claims.

What are we doing differently in Louisiana that causes our citizens involved in accidents to file more claims and to sue each other more often than nearly every other state? It is imperative that we find answers to these questions, because anyone with even a basic knowledge of insurance understands that the cost insurance companies incur to pay claims is ultimately passed on to the policyholder in the form of higher premiums. Higher and more frequent claim payouts will necessarily lead to increased premiums.

When carriers who insure automobiles determine that the risk is greater than the potential for profit despite an increase in premiums, they will begin to non-renew policies, stop writing new policies, or sometimes pull out of a state altogether.   We are seeing this happen right now in Louisiana, especially with commercial auto, trucking, and logging insurance. The companies remaining after that outmigration then have less competition and are thus largely free to ratchet up their rates, making for a vicious cycle pinching the wallets of ordinary Louisianans.

Perhaps the most obvious area where fairness appears to be lacking in the process of adjudicating automobile injury claims is the manner in which medical bills resulting from the treatment of a claimant’s injuries are presented to a judge and jury. We have heard testimony in multiple committee meetings that the jury is often presented only with the billed amount, or “sticker price,” for medical costs, rather than the actual cost of treatment that is incurred.  In addition, the person being sued is typically not allowed to present evidence of what the usual and customary cost of medical treatment is, preventing the jury from obtaining all the information needed to make informed and rational decisions regarding the appropriate monetary award for medical costs and for non-economic damages such as pain and suffering.

During the upcoming session, I will be advocating for medical billing transparency legislation that allows the jury to consider billed costs, incurred costs, and evidence of reasonable and customary costs for similar medical treatments.

Another factor the legislature must consider in addressing the automobile insurance crisis in Louisiana is the increasing prevalence of “nuclear verdicts”, or jury awards over $10 million in civil lawsuits. In 2023 alone, Louisiana state courts awarded over $400 million in nuclear verdicts against businesses, with many of these awards stemming from litigation related to auto accidents. In September of last year, a St. Landry Parish jury rendered a $220 million verdict in a lawsuit involving a collision between a pickup truck and an ambulance, where an unrestrained EMT in the ambulance sustained significant debilitating injuries. The award included $155.5 million in non-economic damages, which typically includes pain and suffering, emotional distress, mental anguish, disfigurement, and loss of enjoyment of life.

Based on testimony heard in our recent committee meetings, there appears to be a direct correlation between the growing frequency and magnitude of these large verdicts and increasing insurance rates – especially in commercial auto and trucking insurance.

One option the legislature should consider to address the prevalence of nuclear verdicts in automobile liability lawsuits is the imposition of caps on non-economic damages for personal injury cases. Several states have established caps on non-economic damages in personal injury cases, including Mississippi, Oklahoma, and Tennessee. The state of Iowa recently passed legislation that imposes a cap on non-economic damages per plaintiff in cases involving commercial motor vehicles.

I understand the arguments of those opposed to limiting non-economic damages when they claim that you can’t place a monetary value on the loss of life, or on subjective losses like pain and suffering, emotional distress, permanent physical disfigurement, or mental well-being. However, we must also acknowledge that arbitrary and exorbitant monetary awards rendered by a jury that may not have all the information relevant to a case, create an environment hostile to free enterprise and detrimental to hard-working, middle-class families that comprise the backbone of our state’s economy.

A civil justice system that incentivizes inflated monetary awards that are not proportional to the loss suffered causes great harm to families, churches, businesses, municipalities, parish governing bodies, and all entities and individuals that must purchase automobile insurance. The greatest burden on Louisiana citizens today is the exorbitant cost of insurance, and we have a duty as legislators to seek solutions that protect the public, promote healthy competition, and allow for economic flourishing.  We cannot afford to ignore this problem or to continue caving to special interests who benefit from the status quo.

Over the past four years I have passed more bills to hold P&C insurance companies accountable and protect policyholders than any other member of the House (HB520 & HB609 in 2024, HB110 & HB183 in 2023, HB118, HB539 & HB831 in 2022, HB457 & HB591 in 2021).  The great majority of my personal business these days involves representing commercial and residential property owners against insurance companies in disputed property claims through the Appraisal process. So, I certainly understand that insurance companies sometimes fail to fulfill their contractual obligations, and at times may not treat insureds or claimants like they should.  That is why it is imperative that we have an impartial and unbiased civil justice system available to anyone who has been harmed or suffered loss.

However, from my perspective the scales of justice have become skewed in Louisiana and must be rebalanced to level the playing field and provide for transparency, equality, and fairness throughout the process so that justice is available for the plaintiff and for those accused of wrongdoing.

Transparency in medical billing and the imposition of monetary caps on non-economic damages for personal injury cases stemming from auto accidents are just a couple of the options the state legislature will be considering in an effort to address the insurance crisis in our state during the next legislative session.

I look forward to continuing this discussion with all stakeholders in the weeks leading up to the regular session, and it is my sincere desire that my fellow legislators will join me in listening to the cries of our constituents who are demanding solutions, rather than the shrieking of special interests on both sides of this issue who care only about their profits.

If the state legislature is going to take up this fight and get serious about passing meaningful auto insurance reforms next session, we need to hear from the families and businesses we represent that are struggling just to make ends meet because Louisiana is the most unaffordable state in the nation for auto insurance.

On Wednesday, February 6^th at 6:00 p.m. there will be a public town hall meeting held at the Kees Park Community Center in Pineville to hear from Insurance Commissioner Tim Temple, with the main topic of discussion being the affordability and availability of automobile insurance in our state. The meeting is being hosted by Speaker Pro-Tem Mike Johnson, Rep. Jason Dewitt, and myself. Please show up for the meeting and let your voices be heard.

Hopefully, this will be the first of a series of meetings to be held by representatives across the state to give their constituents an opportunity to voice their concerns and discuss possible solutions being considered by the Legislature. If you have comments or questions, please feel free to contact me at (318)765-9606 or gfirment@legis.la.gov. Thank you and God Bless.