Insurance Research Council: injury claims, litigation rates, and underinsured motorist use largely explain Louisiana's high premiums

The Insurance Research Council (IRC) presented data to the joint committee showing that injury‑claim frequency, underinsured‑motorist utilization and litigation rates are the primary drivers of Louisiana’s higher auto insurance expenditures.

Dale Porfilia, president of the IRC, summarized the organization’s October brief and data drawn from the National Association of Insurance Commissioners. IRC finds Louisiana’s average auto expenditure is materially above most peer states; when normalized by median household income, Louisiana’s affordability index ranks among the highest in the nation. IRC identified three key differences from national averages: a much higher share of crash incidents producing bodily‑injury claims (about 49% in Louisiana versus 26% countrywide), a large rate of underinsured‑motorist usage (reporting 35.6 vs 15.7 nationwide in the IRC brief), and elevated claim litigation rates.

Porfilia said the IRC’s datasets do not, on their own, establish causation for these differences, but they do pinpoint where legislators should focus data‑collection and policy work. He encouraged the committee to require additional reporting from carriers on loss‑adjustment costs and the components of claim expense so state policymakers can compare Louisiana to peer states on an apples‑to‑apples basis.

Committee members asked whether the IRC provides legislative recommendations; IRC said it does not lobby or draft statutes but can use its data to evaluate policy proposals and help the legislature measure likely impacts.

The IRC also noted trends nationwide: increasing attorney involvement in auto injury claims and a rising share of claims that go to litigation. IRC analysis indicates attorney representation tends to increase the amount paid by the carrier but — after attorney fees — leaves plaintiffs with less on average and extends the time it takes to settle claims.