Reasons for high auto insurance rates in Louisiana


Reasons for high auto insurance rates in LouisianaMost families in Louisiana are already struggling with their finances and the fact that Louisiana is one of the most expensive states in the country if you have to purchase auto insurance is not really good news.

The auto insurance rates in Louisiana have climbed steadily since many years now and they are the second highest in the US and are only behind Michigan. As per the new study conducted by a website, Pelican State drivers are currently paying an average premium of about $2,453 each year, which is a lot of money. During such tough economic conditions where the food prices continue to go up whereas the weekly paycheck doesn’t really match up, it is not difficult to imagine what the residents in Louisiana must be going through to get that money.

So, one has to look at why we end up paying so much? Is it because of too many accidents or bad roads or lots of uninsured motorists or all of them? While these may be some of the contributing factors, the main reason for this sky-high pricing is due to the loose nature of our present laws, according to the NAIC.

For instance, Louisiana is one of the few states in the country which has a jury trial threshold or $50,000, which means that when a lawsuit is filed, you can get a trial before the jury only if the claim is over $50,000.

There are a number of lawsuits that are filed following auto accidents where the claims are less than $50,000. Hence, these cases are decided by Judges, most of whom may be fair, but there may be some of them who take sides with the local residents who may have been instrumental in electing them, rather than taking up for the insurer – regardless of who is at fault. This might not seem like a problem in the short term, but in the long run this system will clearly lead to far more expensive outcomes, which in turn lead to expensive auto insurance premiums for everyone.

Hence, it is important that we get rid of the $50,000 threshold in Louisiana and instead give every individual a right to choose the jury trial in order to ensure that lawsuits are settled only on the basis of the merits of the case. This small change could put Louisiana on par with the rest of the states and also help improve the entire auto insurance system by lowering the rates.