Premiums for auto coverage are rising across the country but this state has particular issues causing a spike.
Drivers in nearly every state are watching their premiums rise this year and, due to unique conditions in the state, Louisiana car insurance rates are rising significantly. In fact, the current environment in the state is making sure auto policies are among the most expensive in the U.S.
Upon hearing the news of the rate hikes, drivers in the state have expressed significant frustration.
Local papers reporting on the Louisiana car insurance rate increases quoted angry consumers who feel the situation is not fare in their state. They already know they’re paying more than drivers in neighboring states and many feel they are being punished based on their residency in Louisiana. Even rivers with spotless driving records are paying more and expressing a sensation of powerlessness.
The state is hardly alone in seeing increases in their auto insurance premiums. That said, the reason for the high prices is different in Louisiana than it is in many other states. Across the country, most states are seeing increasing auto insurance rates as a result of low gas prices (which can lead to more cars on the road because driving is more affordable), and the high cost of vehicle repairs. That situation is worsened by the rise in distracted driving particularly in the form of smartphone users.
Louisiana car insurance rate issues are linked with a different spectrum of issues.
The state has additional complexities to its auto insurance industry which keep premiums high and rising regardless of how clean a driver’s record may be.
“There’s a lot of uninsured motorists and there’s a lot of stolen vehicles and there’s no such thing as a free lunch so we’re all paying for that,” explained Don Fearn, owner of Mid-City Auto Title and Insurance.
In the state, 14 percent of drivers on the road are uninsured and another 40 percent of motorists carry only the legal minimum policy. Furthermore, the state has an especially high instance of collisions and litigation, keeping the cost of coverage continually high.
According to the Louisiana Department of Insurance, the state represents 17 percent of auto insurance policies, but 51 percent of lawsuits involving that coverage. Lawsuits are among the most expensive contributors to Louisiana car insurance rates.
What per cent of the insured vehicles are being driven by someone in the family who is not listed on the policy? That is still driving without insurance and impossible to stop. Poor families use that and end up better off financially.