Louisiana tops the list for most expensive car insurance policies across the country, with a recent report suggesting that no other state pays more for their coverage.
According to the insurance comparison site Gabi, Louisiana drivers paid an average of $3111 a year for insurance in 2018, far above the national average.
So why is it so expensive to get insured in Louisiana, and what can you do to keep your costs down?
Over 130,000 premiums paid by drivers across the US were compared against average regional rates for major insurance companies. Information was gathered concerning how much was paid and important policy details.
Analysis shows that drivers in Louisiana paid a staggering $1159 above the national average last year. No state paid more than this.
There are several contributing factors that affect Louisiana’s car insurance rates. From dangerous driving to frequent injury claims and changing state regulations, we’ll take a closer look at the circumstances which make car insurance so expensive in Louisiana.
One reason for inflated car insurance rates is likely related to uninsured drivers on the road. In Louisiana, it is estimated that 13% of motorists do not have insurance, according to Insurance Research Council figures.
The Louisiana Department of Insurance estimates the percentage to be even higher, with as many as 15% or 1 in 8 drivers not being insured.
This is higher than the state average and would rank Louisiana in the top 20 states for the percentage of uninsured drivers.
With more uninsured drivers on the road, this increases the frequency of uninsured driver claims in the state. These claims cost insurers a lot of money which leads them to push up the price of car insurance across the board.
Another contributing factor is the high rate of injury claims within the state. Louisiana has more bodily injury claims than most other states, which costs insurance companies a lot financially.
What’s more, an estimated 40% of Louisiana drivers carry only the minimum car insurance required by state law. This means that in the event of a serious accident, drivers will often resort to lawsuits in order to get larger payouts.
Louisiana has one of the highest rates of accident frequency in the US. Sadly, figures from the National Highway Traffic Safety Administration indicate that almost 50% more people per 100,000 were fatally injured in car accidents in Louisiana in 2016 than the national average.
Car accident lawsuits for less than $50,000 are held before elected judges. These judges regularly side with the consumer, costing insurance companies more money and driving up insurance prices.
The state recently approved increased car insurance rates for multiple insurers across Louisiana. The average annual auto insurance premium rose by $124 from 2018 – continuing the current trend.
From 2015 to 2018, rates increased by an average of $645 year on year. However, this is not exclusive to Louisiana, as the national average also increased during this period.
Variety of Insurance Companies
Car Insurance Rates are lowest in states like Maine, where there is a wide variety of insurance providers. The more insurance providers used within a state, the higher the competition for customers, and the lower insurers drop their rates.
By contrast, State Farm is set to insure approximately 1 in 3 drivers in Louisiana. As a comparison, the average car insurance price for a year in Maine is $1447 – less than half that of Louisiana.
How Can You Lower Your Rates?
The number one way to ensure you have the lowest car insurance rates possible is to shop around.
Jim Donelon, Insurance Commissioner for Louisiana, has repeatedly encouraged motorists to compare prices to find the most affordable insurer.
Insurers in Louisiana can only alter their rate once per year. It is recommended by officials that you reassess your insurance options at least once a year in order to get the best deal available.
In conclusion, insurance rates in Louisiana are very high due to fewer people on the road having auto insurance, more traffic accidents, fewer insurance companies operating in the state, state regulations allowing for increases in prices, and more lawsuits against insurance companies as a result of so many people only having the lowest available legal coverage.