Are ‘Frivolous’ Lawsuits Contributing to Record-High Insurance Rates in Louisiana?

As Louisiana’s home and car insurance rates continue to climb, industry experts are advocating for legal changes to lower costs. Their target? Excessive attorney involvement in lawsuits over insurance claims.

On April 14, the day the Louisiana State Legislature began its 2025 session, the Insurance Information Institute (Triple-I) launched an awareness campaign in Baton Rouge. The organization aims to highlight how “frivolous” insurance claims lawsuits from “billboard attorneys” harm Louisiana’s economy.

“We have seen in states such as Florida that comprehensive legal reform works — leading to market stabilization, more competition, and better insurance pricing for consumers,” Sean Kevelighan, president and CEO of Triple-I, said in a release.

Understanding — and stopping — legal system abuse

Legal system abuse is an umbrella term that Triple-I defines as policyholder or plaintiff-attorney practices that increase costs and time to settle insurance claims. It can appear as “get-rich-quick” messaging, increasing attorney fees, or third-party litigation funding — a multi-billion-dollar industry in which investors buy an interest in the outcome of a lawsuit.

Elected officials and community leaders hotly debate how to address litigation reform and whether it’s necessary. Skeptics argue that litigation limitations restrict access to justice and disincentivize corporate accountability. They also say insurers have never provided evidence that it lowers insurance costs, according to analysis from the nonpartisan Council of State Governments Southern Regional Office.

Advocates, though, think it’ll help.

“We do not believe tort reform measures will prohibit lawsuits being filed over a legitimate claim dispute that can’t be settled otherwise,” Mark Friedlander, senior director of media relations at Triple-I, told Insurify.

While legal system abuse drives up insurance costs for everyone, Triple-I reports, it has even broader economic effects.

In 2023, legal services groups in Louisiana spent more than $45 million on advertising, according to the American Tort Reform Association. That same year, Louisiana consumers spent an extra $1,011 on a “tort tax,” the costs of excessive litigation, according to a 2024 report from economic and financial analysis firm the Perryman Group.

Louisiana’s unaffordable insurance costs

Whatever the effect of legal system abuse on insurance rates, it’s only one of many factors influencing costs in Louisiana and nationwide. Billion-dollar storm events and inflation on building materials and auto parts are also driving rate hikes in Louisiana, according to Insurify’s analysis.

Louisiana is the second-most expensive state for homeowners insurance, according to Insurify’s home insurance report. Homeowners in Louisiana pay an average of $10,964 per year for coverage — more than three times the national average of $3,259.

Insurify projects a 27% increase in Louisiana’s average home insurance cost, to $13,937, by the end of 2025.

Louisiana is also the eighth-most expensive state for car insurance. Drivers pay an average of $2,820 per year, according to Insurify’s car insurance report. That’s above the national average of $2,313. Insurify projects a 1% increase in Louisiana’s car insurance costs, to $2,944, by the end of 2025.

That means the average Louisiana homeowner and car owner pays $13,784 for often-mandatory insurance coverage.

But unaffordability comes down to more than just cost. Rather, it’s about how much people have to spend on those costs. Louisiana’s median household income was $60,023 from 2019 to 2023, according to the U.S. Census Bureau. And 19% of Louisiana residents live in poverty. Louisiana households could spend nearly one-quarter of their income on home and car insurance.

By comparison, neighboring Mississippi has a lower median household income of $54,915, with 18% of residents living in poverty, per the U.S. Census Bureau. But average home and car insurance costs amount to 13% of annual household income there.

What’s next: Legislating reform — or not

Now that the Louisiana legislature is in session, Triple-I is campaigning for legal changes and asking Pelican State residents to do the same.

“Louisiana lawmakers have more work ahead during this year’s legislative session, and we hope the progress being made stays on course,” Kevelighan said. “As we continue to be inundated across the U.S. by the likes of billboard attorneys preying on vulnerable Americans and increasing insurance costs for everyone, now is the time for further action from Louisiana’s legislators.”

At least two related bills have already cleared the committee and are in third reading, the last step before a final house vote.

Rep. Emily Chenevert, R-East Baton Rouge, introduced House Bill 431, which would significantly change how Louisiana uses fault to determine who can sue for and recover damages. Currently, if a plaintiff is 60% at fault for their injuries in a car accident, they can recover 40% of the damages. House Bill 431 would change the law so that if a plaintiff is found less than 51% at fault, they can recover damages minus their fault percentage. But if a plaintiff is more than 51% at fault, they can’t recover any damages at all.

Rep. Brian Glorioso, R-St. Tammany, introduced House Bill 34, which would limit how much a plaintiff can recover in medical expenses to what insurers or Medicaid actually paid. This could reduce damages and the insurer’s financial liability in personal injury cases.

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