Why does it cost so much to insure Louisiana drivers?

| May 8, 2019 | Firm News

Louisiana has some of the most expensive auto insurance rates in the country, and we can’t even blame icy roads or snow.

Which begs the question for insurance agencies, why does it cost so much to insure Louisiana drivers? As it turns out, there are several factors at play in the state that affect the cost of providing insurance.

Litigious motorists

Louisiana drivers cost insurance companies almost $3.5 billion in lawsuits last year alone. The reason for this is that by some estimates, 40% of drivers carry the bare minimum of insurance requirements. This means more accident cases go to court once the coverage limit is reached.

That staggering number is 20% higher than the national average spent on lawsuits. These have a ripple effect that makes covering all drivers more expensive. When combined with half the population driving underinsured, the costs continue to mount.

A spike in uninsured cars

When someone is in an accident in Louisiana, there’s a 13% chance the other driver has no auto insurance. This means more policies are being stretched to cover all the expenses of a customer instead of splitting it with the other driver.

Louisiana companies spend more money per accident, which affects both insurers and drivers.

Increasingly distracted drivers

Louisiana ranks 10th in distracted driving rates among motorists. Even though the state was an early adopter of the ban on texting while driving, it hasn’t curbed the distracted driving epidemic.

Distracted drivers are poor drivers and have led to increases in both fatal and nonfatal accident rates. As the 10th-most distracted state, dangerous driving costs companies millions each year.

Protecting against unnecessary costs

As insurance companies deal with the rising expenses of insuring Louisiana motorists, it’s important to have a viable strategy when heading to court. As more motorists are involved in accidents with distracted and underinsured drivers, insurance companies are being asked to shoulder the costs.

When a company is facing a massive claims lawsuit, a skilled attorney can make all the difference.