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Louisiana Insurance Report

What Everyone Should Know About Louisiana Insurance Rates

Posted by Levi Kastner on Feb 26, 2018 1:25:43 PM

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Car insurance rates are based on a variety of risk factors. Some factors you can’t control, such as your age, but many you can -- such as your driving record, claims history and credit score. You can also control the car you purchase and where you live. Location, location, location isn’t just a mantra for buying a house in a nice area with a good school district; it’s also normally a big rating factor for auto insurance companies.

State car insurance requirements vary from one state to the next, as do the amount of claims -- especially for weather-related items such as hail damage, which can affect rates. There are other factors that affect Louisiana insurance rates, some of the main ones being state laws, local court systems, crime, traffic and crash rates.

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The percentage of uninsured drivers in the state and how much competition there is among the car insurance companies also affects Louisiana car insurance rates. Typically, having more auto insurance providers in your state will provide you with a better opportunity to obtain cheaper rates.

In 2010, 2012 & 2013 Louisiana held the mantle of the most expensive state. Louisiana dropped down to fourth place the last couple of years but is back up to second place with an annual premium of $1,921, which is 46 percent higher than the national average. 

Like Michigan, Louisiana has a higher than average amount of uninsured motorists on the road.

Nearly 14 percent of Louisiana drivers are estimated to be driving without insurance. And, a lot of insured motorists  only carry a bare bones policy. 

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According to Louisiana’s Insurance Commissioner Jim Donelon, about 40 percent of drivers carry the minimum car insurance limits required by state law. With a lot of “working poor” in Louisiana, Donelon has noted that those in auto accidents see ads by lawyers saying they will get them money and feel entitled to get a big check for a minor accident. Thus litigation is another reason that Louisiana car insurance rates are so high.

Donelon has cited as an example of the excessive amount of litigation by highlighting the Louisiana Farm Bureau. This insurer is part of a six-state chain of insurance providers; it carries around 17 percent of the policies from the six states, but handles a whopping 50 percent of the lawsuits resulting from auto accidents.  When insurers pay out more in claims, the cost is passed to motorists in the form of higher premiums.

Rates in Louisiana also continue to rise due to additional reasons that Donelon has pointed out – widespread distracted driving and cheap gas.

 

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The Louisiana Highway Safety Commission reported that from 2011 to 2015, 192 people in Louisiana died and almost 27,000 people were injured because of a distractions. Cheaper gas results in more drivers out on the road, who now are more distracted than ever, which leads to more accidents.  The cycle continues as the claims could then end up in litigation. 

If you want to save money on your auto insurance, schedule a meeting with me using the link below. 

 

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