Be prepared to pay more for car insurance in these states

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02Owning a car can be quite an expensive affair, especially in certain states of the United States of America. One of the most recent surveys conducted reveals that the residents of Louisiana have to pay the most for the auto insurance coverage followed closely by Michigan. Maine, one of the states along the Eastern coast, ranks the least.

The results for the study conducted were calculated using the average rates for auto insurance for over two thousand four hundred vehicles, based in 10 different zip codes in every state and the prices offered by 6 biggest auto insurance providers. In addition to the national average, the state averages were also calculated to make it easier for customers to compare the cost of auto insurance in various states.

The drivers in Louisiana were left shocked at this revelation. The agents there however reacted differently. Though the insurance agents, unlike the drivers, were not surprised, they were surely disappointed. When asked for the reason for the high prices, the insurance agents were quick to point out towards the court system in the state.

One of the main concerns is that jury trials are given only for claims that exceed $50000. Hence, in most cases, people settle for claims lesser than this amount, which in turn leads to the increase in the cost of auto insurance coverage. The Director of the Professional Insurance Agents of Louisiana, Duane Dimattia, based on Baton Rouge, says that most of the claims get settled at around $49000 in order to avoid jury trials.

The ex- President of the Independent Insurance Agents of Greater New Orleans, Richard Clements said that the insurance settlements are focused towards the public as opposed to state legal facts because the judges in Louisiana are not appointed, they are elected.

Despite the fact that junkyards in Louisiana crushed over 125,000 vehicles post Hurricane Katrina, it is not the reason for the increase in auto insurance prices. Clements said that there are other factors other than just the hurricane that led to high costs.

In addition to the high monetary limits for jury trials, Dimmatia said that the other factors that play a major role in pushing up the costs are the high number of per capita lawsuits and high rates for bodily injury.  He also said that the aging roads in this state were the primary reasons for the latter.