Our state’s economy has immense potential, yet it’s weighed down by skyrocketing insurance costs and a legal climate that drives jobs away. Public opinion polls consistently show this is a key issue for voters. Meanwhile, lawmakers have filed hundreds of bills aimed at bringing down insurance rates, which will be debated during the 2025 Regular Legislative Session over the next three months. But proposals to use the power of government to regulate prices or restrict competition are decidedly anti-free-market and will only lead to making the situation worse, even if they’re things that might sound good at first glance.

So, how can the Louisiana legislature address these big complex issues without going astray from free-market principles? Of course, our mission at the Pelican Institute is to support principled, market-driven solutions that can demonstrably move the needle without unnecessary government intervention.

A free-market approach prioritizes the following:

  • Competition and consumer choice over government overreach.
  • Streamlined regulatory structures over complex or heavy-handed regulations that stifle new entries into our market.
  • Transparency measures that provide regulators and consumers with the information needed to support informed decisions.
  • Structural reforms for the legal system that underscore fairness and accountability and that curb lawsuit abuse.

By reducing barriers, we can attract more carriers, increasing competition and driving down premiums. States like Texas have shown this works—more insurers mean better options and lower costs for consumers.

It’s also clear a root cause of our insurance woes is Louisiana’s legal system, with excessive litigation costing our economy billions and inflating insurance premiums. Frivolous lawsuits, particularly in auto litigation, raise rates for everyone and harm the legal system overall.

Free-market legal reform starts with fairness and accountability. We and others have written about legal reform at length over the years, and the legislature should be commended for their work last session to begin addressing these issues in earnest. But consumers are still hurting from sky high auto insurance rates. This is a clear indicator there’s a lot more work to do.

Among the most important issues that need to be addressed is how our legal system handles the recovery of medical expenses following an accident. When compared to the national average, Louisiana has three times the number of bodily injury claims and twice the number of losses. Why are Louisiana’s rates of bodily injury claims and losses so substantially out of proportion? In addition to truly bad actors in the system who fake accidents or injuries, current rules prohibit juries from considering the true cost of medical expenses that are actually paid to medical providers. This often leads juries to overestimate the actual cost of medical expenses and ultimately award inflated judgements. There’s no question this is a major driver of insurance premiums, and it needs to be addressed.

Lawmakers should also prioritize reversing a unique Louisiana legal doctrine known as the “Housley Presumption.” Under this judicially created policy, plaintiffs in personal injury cases do not have to prove actual accident-injury causation. This is absurd; all claims should be subject to scrutiny in a trial.

Big reforms will take focus on what actually works, but they don’t require big government—they require smarter rules that level the playing field. By fostering competition in insurance and fairness in courts, we can lower costs without sacrificing consumer protections. The legislature has an opportunity to catch up to neighbors like Texas and Florida, both of whom have seen better outcomes for their people.