USAgencies

Let’s face it – it’s not unusual for drivers to complain about their high auto insurance rates, but in Louisiana, they may have a point. There are a number of factors auto insurance companies use to determine the amount in annual premium you’ll have to pay, including driving record, age, and vehicle safety features. But, forgotten in all the hoopla over the most obvious reasons – is where you live.

Insurance companies tend to consider certain places, be it neighborhoods, entire cities, or states as higher risk areas. The result – fair or unfair – is that drivers who reside in those places pay significantly more for their insurance than an individual residing somewhere deemed less risky for the insurer.

While this time around Louisiana ranks as only the seventh most expensive state for car insurance in this year’s Insure.com survey, the state is often a frequent contender for the No. 1 spot. Of the other states in the Southeast, only Georgia claims higher average auto insurance rates.

To some, what seems unfair is the fact that Louisiana is rated as the second poorest state in the country and its car insurance costs are far more likely to impact the Bayou State’s drivers’ budgets than the pocketbooks of their Georgia counterparts.

Yet, according to data from the Insurance Research Council, the average auto insurance premium in Louisiana is a staggering $2,536 per year. By comparison, that’s almost twice the median annual premium in the U.S. And, it’s nearly triple what motorists pay in the state of Maine, currently ranked the cheapest place to insure a car.

As if that wasn’t high enough – Louisiana has the boasting rights to being home to the great city of New Orleans. But, the city would rather not boast about its ranking as the third most expensive city in the country in 2012 for auto insurance. With the average premium costing in the neighborhood of $3,599 per year, it’s easy to understand the reason many Louisiana drivers are up in arms.

So, why in the world does auto insurance cost so much in Louisiana compared to the rest of the country? Well, it’s complicated. However, if you’re to believe auto insurance companies – it’s the state’s judicial system that’s to blame or maybe it’s the lawmakers’ fault. Take your pick.

In simpler terms – according to some experts, Louisiana policy-makers have made a number of terrible decisions that have contributed to these high rates. Meanwhile, others point the finger at Louisiana’s judicial system, which requires claims to reach $50,000 before they are allowed to head to a jury trial.

Therefore, any claim under that amount is resolved by an elected judge, who typically sides with a private party rather than an insurance company. As a result, a large number of cases are settled for $49,000, instead of going to a juried trial, which translates into higher premiums from insurance companies.

But, another culprit – uninsured motorists – is also to blame for everyone paying more than they should for car insurance. Unfortunately, the high rates have placed many lower-income Louisiana residents in the position where they have to choose between auto insurance or buying food for their family.

Although driving without insurance is illegal in Louisiana – with serious penalties for doing so – many people, who can’t afford the premiums, take the risk. And, insurance companies need to recoup their losses by charging more for coverage from insured drivers – which consistently drives up insurance rates.

No matter what the reason is – auto insurance in Louisiana is too high. Make sure you’re getting the best coverage at the lowest rates available by getting a free Louisiana auto insurance quote today!

Do you believe it’s fair that Louisiana auto insurance companies charge such high annual premiums to those with good driving records? Feel free to share your thoughts in the comments section below.