According to Forbes.com, Louisiana has one of the highest car insurance rates once again. Our state ranked number 4, with the average insurance premium being $1,774. According to previous reports, Louisiana held the number one spot in 2013 (with insurance rates topping $2,699 and holding the spot for second place in 2011). By comparison, the national average for car insurance premiums in the U.S. is a little more than $1,500. It has been claimed by Louisiana car insurance companies that our state has such high rates because of poor roads and the high incidences of natural disasters and high levels of alcohol consumption (and therefore car accidents). Additionally, Louisiana car insurance companies claim that the state’s direct-action law has led to excessive litigation against insurance companies, which has forced them to raise their premiums.
A direct-action lawsuit is brought directly against an insurance company for a wrong done by the insured. The plaintiff still has the burden of proving the facts, as well as proving that the insured was covered by the insurance company, and that the insurance policy covered the kind of wrong for which the plaintiff is seeking remedy. Specifically, La. R.S. 22:1269 (formerly 22:655), provides for a direct action against a liability insurer in two instances: 1) where the policy or contract of liability insurance was issued (domestic insurer) or delivered (foreign insurer) in Louisiana; or 2) where the accident or injury occurred in Louisiana. However, the claim that lawsuits against insurance companies driving up the premium is not so cut and dry.
The Lawsuit against State Farm
This past August, Louisiana Attorney General Buddy Caldwell filed a lawsuit against insurance giant State Farm Auto insurance for ‘unsafe and deceptive’ auto repair practices in the state district court in Baton Rouge. This lawsuit has been combined with hundreds of other plaintiff lawsuits against the company, and will be consolidated. Specifically, the allegations made by the Attorney General and many other citizens is that State Farm insurance forces repair shops to use cheaper (lesser quality) parts when making repairs. These shops (called preferred repair shops) have contractual obligations to State Farm, and must abide by their policy if they want to be compensated for labor and parts. As a result repair shops have used junkyard,” “knock-off” or “aftermarket” parts made in Taiwan, which have caused numerous safety issues. Since the Office of the Attorney General started its investigation, they have found “hundreds of violations, and they include not just State Farm but the industry itself.” These unsafe parts will notably be the cause of more accidents and injuries.
Get Compensation from Louisiana Car Insurance Companies
The personal injury attorneys at Harrell & Nowak have helped many victims in New Orleans, Kenner, Metairie, and throughout Louisiana obtain financial compensation from Louisiana car insurance companies in car accidents. Our attorneys will interview you, read the police reports, and take photographs of the wreckage ourselves. We have recovered millions of dollars in settlements and verdicts on behalf of clients, and a success rate of 90% in our litigation. We will give each client the attention they deserve for each case. If you have or a loved one suffered due to someone else’s negligence, contact our New Orleans injury law firm today for a free, confidential consultation.