Louisiana auto insurance rates are among the least affordable in the United States, according to a recent Insurance Research Council (IRC) study. The study was titled: “Auto Insurance Affordability: Cost Drivers in Louisiana”. That said, the Louisiana High Auto Rates Task Force has been working on the challenge of improving affordability since August.
The task force has met several times to address the causal factors and propose solutions to the issues.
The Louisiana Department of Insurance Commissioner, James Donelon, has appointed industry leaders and legislators to work together to identify ways to reform the current coverage system. They met in November with Victoria Kilgore, the director of research at the IRC. Kilgore offered an overview of the IRC’s findings regarding the Louisiana auto insurance rates.
There are two factors that make Louisiana’s car insurance rates the least affordable in the country, said IRC data. Those factors are the frequency of auto collisions in which there are injury claims, and the frequency of litigation and involvement of attorneys. The data showed that from 2011 through 2015, the state had he least affordable rates in the US based on average household income compared to the average amount paid in annual premiums, as reported by Watchdog.org.
Affordability has become a major issue in the state, underscoring a need to lower Louisiana auto insurance rates.
“The affordability of auto insurance is an important issue in Louisiana and many other states,” said Chartered Property Casualty Underwriter (CPCU) Elizabeth Sprinkel, IRC senior vice president. “As policymakers seek to address this issue, it is vital to have an understanding of the cost drivers that underlie variations in the cost of auto insurance for consumers.”
Last year, Louisiana had the greatest frequency of bodily injury liability claims in the United States. For every 100 insured vehicles, there were 1.75 claims filed in the state. This is close to twice the national rate of 0.9 claims filed for every 100 insured vehicles.
Also affecting the Louisiana auto insurance rates is that drivers in the state are 60 percent more likely than the national average to hire an attorney and file a lawsuit relating to an auto collision.
