Auto insurance dominates Donelon-Temple debate

The incumbent state Commissioner of Insurance touted the reduction by several companies on auto insurance premiums, while his opponent said it is far from enough to help Louisiana drivers.

The longstanding issue of high auto insurance commanded much of the discussion Monday between Jim Donelon and opponent Tim Temple during a debate hosted by the Press Club of Baton Rouge.

Donelon, 74, also served 14 years in the state legislature. He is a native of New Orleans and held offices in Jefferson Parish.

Temple, 49, is a native of DeRidder, who now lives in Baton Rouge. He serves as president of Temptan, LLC, a family owned company that manages financial and real estate holdings.

He touted 20-plus years of actual practical insurance industry knowledge.

"Louisiana is facing crisis on auto insurance unlike what we haven't seen in 20-plus years," Temple said in his opening remarks. "Louisiana is the most unaffordable state in nation for insurance."

Louisiana private motorists in 2018 paid an average of $2,298 per year for auto insurance – 50 percent higher than the national average. Louisiana ranked second to Michigan for the highest auto insurance premium, according to Insurer.com.

Donelon said he has brought Louisiana more competition for auto insurance, which has resulted in a rate reduction of 10.5 percent by State Farm for its one million policyholders, while Farm Bureau and Progressive followed suit.

"Together, this is benefitting half of all drivers in the state," he said.

The rates, however, remain twice the amount motorists pay in Arkansas, Mississippi and Texas.

The high rates – combined with a lack of competition for commercial autos and trucking – have negatively impacted the economy, Temple said.

"Commercial autos and commercial trucking, in particular, are in true catastrophe mode," he said. "Many companies don't have but one or two insurers they can obtain a quote from.

"Louisiana needs a commissioner who understands the marketplace, distribution channels and is dedicated to making insurance affordable again," he said.

Temple called Donelon "the architect of the worst market for insurance in America," and referred to a listing by conservative thinktank R-Street Report, which gave Louisiana the only F rating in the survey, based on its No. 50 ranking for competitive marketplaces for insurance across America.

"Louisiana needs a commissioner who understands how insurance works, how it affects their lives, economy and pocketbooks, and who is dedicated to making insurance affordable again, and that's what I'll do as your next commissioner," he said.

Donelon defended his job performance, and said he has restored integrity to a once scandal-ridden office.

He became commissioner in 2005, shortly after the state's two worst hurricane events in modern times – Katrina and Rita, three weeks apart – and shortly after former commissioner Jim Brown had been sent to federal prison.

"Needless to say, insurers split our state in droves and ceased writing new business, but I'm proud to say that today we have more insurers doing business in our state across all lines than ever before," Donelon said. "That competition has resulted in lower rates for consumers of auto, workers comp, and homeowner insurance."

He also touted a 5.5 percent reduction in premiums for worker compensation coverage and 19 percent lower over the last 10 years because of an all-time high of 253 companies – and all-time high – in competition across Louisiana.

"Homeowners insurance increase just 1 percent in each of the last five years due to the fact we have 32 new insurers, replacing exiting national carriers who have left," he said.

Both agreed that competition – and not the commissioner – should play the biggest role in reduction of premiums.

The commissioner has little authority over reductions. State Farm filed for reductions based on lost revenue it hopes to recoup from 100,000 policies it lost to competitors, Donelon said.

"It's our broken legal system that is the longtime cause for insurance rates being as high as they are in this state," he said.

He criticized state lawmakers for voting down legal reform bills in 1998 and this year, citing the "legal committee on the Senate side."

Temple accused Donelon of inconsistent action on tort reform.

"You can't wait until election year to do tort reform – you need to do it every day," he said.