You might feel like you spend more than your out-of-state friends do on car insurance—and you
wouldn’t be wrong. According to WalletHub, Louisiana ranks 48 out of 50 for the highest national
insurance rates. Average Louisiana car insurance rates are up to 50% higher than the national mean.
- The average insured driver pays roughly $1,150 annually for minimum coverage.
- For full coverage drivers pay approximately $2,549 annually.
Before you hit the brakes, remember that rates are influenced by a large variety of factors.
In addition to the costs of minimum liability coverage, factors like frequent lawsuits, road maintenance,
and demographics also influence premiums.
Here are just three reasons why insurance in Louisiana is so expensive:
#1 Lawsuits in Louisiana and Insurance Costs
Lawsuits from traffic related incidents are common in Louisiana. Superior Honda cites Louisiana
as the most litigious state when it comes to auto-related incidents:
“Auto-related lawsuits drive up premiums in Louisiana because insurance companies
know they will be more likely to pay out claims—so they pass those costs
onto drivers through higher premiums.”
According to WalletHub, state lawyers in Louisiana are more likely to encourage clients to file lawsuits “for even minor car accidents.” Insurance providers compensate by increasing premiums for drivers.
#2 Extreme Weather
Once hurricane season hits, insurance companies are often overwhelmed with claims. Damage due to flooding, fallen trees, and washed-out roads is common after a big storm. Particularly in recent years, Louisiana has weathered difficult tropical storm seasons, and insurance providers have raised premiums accordingly.
#3 Demographic Factors
Some factors that influence insurance rates are beyond your control. Certain age ranges or zip codes will automatically raise your premium. That being said, it is possible to improve your insurance rate by driving safely and improving your driving skills. Just because you live in the middle of the city, doesn’t necessarily mean you have to pay more.
Demographic factors that influence insurance premiums include:
- Age – WalletHub reports that sixteen-year-olds can expect to pay up to $11,797 annually, while drivers in their twenties pay an average of $2,851 annually. The logic for insurance providers? The more experience you have behind the wheel, the less chance you have of getting into an auto accident and filing an expensive claim, so the lower your insurance premium will be.
- Location – Urban areas with a higher density of drivers—and therefore accidents—tend to have higher premiums than rural areas.
- Finances – Providers appreciate financial responsibility. Drivers with excellent credit scores are more likely to have low premiums.
- Driving Record – If you have a history of safe driving and haven’t filed claims in the past, you’re likely to have lower insurance rates.
Of course, it’s advisable to be proactive about lowering your insurance rates. Students with good grades have a lower insurance rate, as well as drivers who update the safety features of their vehicles. Enrolling in a defensive driving class demonstrates conscientious and responsible driving. Above all, it’s important to follow traffic laws and maintain a good driving record.