Louisiana insurance rates near highest in the country, but do you know why?

Most of us know that Louisiana has some of the highest insurance rates in the country, but do you know why?

One culprit is the relatively low minimum requirements of $15,000 per person ($30,000 per auto accident) for bodily injury liability insurance, even though this doesn’t keep the price of a car insurance policy down, it drives up the need for under-insured motorist, but we’ll get back to this this in a minute. Louisiana is known for overly generous claim settlements, which industry experts claim cause the high car insurance premiums. The state insurance commissioner says that the New Orleans metro area is the worst culprit, with insurance settlements 40 percent higher than the statewide average.

Louisiana’s Natural disasters, such as hurricanes, tropical storms and tornadoes, also wreak havoc and increase the number of claims. A total loss is a more common occurrence in Louisiana than in other states. Unfortunately, collision coverage alone doesn’t cover damage resulting from a natural event, you’ll need comprehensive for that.

Another unfortunate distinction is that we and our neighbors to the east have some of the highest number of uninsured motorist on the roads.  Along with low state minimum insurance requirements, makes it necessary to add uninsured and under-insured motorist coverage to our own policies.

According to the Big 3 auto insurers, it’s a simply a matter of a consistent increase in accidents, claims becoming more frequent and costly, and more drivers back on the road thanks to an improving economic outlook.