Auto insurance rates second highest in Louisiana


06Louisiana is the second highest when it comes to the ranking as per the average of the auto insurance premiums.  The percentage of uninsured motorist as well as pending lawsuits over insurance claims has been very high.  As per the latest figures Louisiana averaged at $2.453 for a new vehicle to be insured while Michigan was leading at $2.541.

Just last year the Pelican State was leading at $2,511 while Michigan came in second at $2,098.  According to the owner and agent of Lafayette-based Herman Venable Insurance Agency Inc. Lonnie Guidry stated that the rates in Louisiana were almost leveling off and a lot of insurance companies had decreases.

According to Guidry, the ‘No Pay, No Play’ law seems to have done some good and worked well.  As per this law, the motorists who don’t possess liability insurance will automatically have to give up the right to collect the first $10,000 in property damage as well as personal injury claims in case of an accident irrespective of who is at fault.  This seems to have brought about some changes.

However, Louisiana’s rate was way above the rates from Vermont which averaged at the 51st place with the rate being $995.  Amongst the top five was Washington D.C. that came in fifth with $2,146, which was behind Montana at $2,190 and Oklahoma which came in third at $2,197.

Apart from Louisiana most of the states saw a hike in the annual premiums this year.  The prime reason for the increase in costs was due to the uninsured motorists across the state.  As per the results of the research that was concluded, the data that was collected from six large carriers from 10 zip codes per state with over 2,400 vehicle models.  The top reason for the hike in insurance rates was largely due to the uninsured motorists and the other factors were court systems, weather, population as well as the type of vehicle that is purchased.

As per the speculations by the uninsured motorists seem to have increased in numbers largely due to recession and the unemployment following that phase.  This trend is more due to the economic factors more than other things, stated Mark Eagan, Independent Insurance Agents & Brokers of Louisiana.  He states that motorists simply cannot afford those rates.

As per the 2009 study conducted by the Insurance Research Council at least 12% of the drivers from Louisiana were uninsured, however lawsuits also played a major role in hiking up the premiums, stated Guidry.