Louisiana Auto Insurance: Why So Expensive?

Louisiana has some of the most expensive car insurance in the United States. The average cost of car insurance in Louisiana is $3,041 per year, which is more than twice the national average. There are several reasons why car insurance is so expensive in Louisiana, including the state's highway density, population, vehicle theft rates, and auto-related lawsuits. Louisiana drivers file more bodily injury claims than drivers in other states, and the state also has a high number of uninsured or underinsured motorists. Insurance companies are forced to raise rates as they have to pay out more in claims.

Louisiana's high rate of auto-related lawsuits

Louisiana's auto insurance rates are significantly higher than the national average. The average cost of car insurance in Louisiana is $3,041 per year, more than twice the national average of $1,424. Louisiana's high rate of auto-related lawsuits is one of the primary factors contributing to the state's expensive auto insurance.

Louisiana has a unique set of factors that contribute to its high auto insurance costs. Unlike states with high insurance rates due to adverse weather conditions or dense urban populations, Louisiana has a different set of challenges. The state has a significant number of irresponsible drivers, resulting in a high frequency of accidents. Louisiana also has a high proportion of uninsured and underinsured drivers, with nearly 14% of drivers lacking insurance and about 40% having only the minimum liability coverage. This situation creates a financial burden for insurance companies, as they have to cover the costs when these drivers are involved in accidents.

Compounding the issue of frequent accidents, Louisiana drivers have a tendency to file costly bodily injury claims and sue other drivers or insurance companies. The state's elected judges often side with consumers in these cases, leading to substantial payouts by insurance providers. According to Insurance Commissioner Jim Donelon, Louisiana has the highest claims-to-litigation ratio in the country, which significantly impacts insurance rates.

The combination of frequent accidents, high claims, and a litigation-friendly environment has resulted in substantial financial obligations for insurance companies operating in Louisiana. As a consequence, insurance providers have been forced to raise their rates to offset these costs, making auto insurance in the state among the most expensive in the nation.

The state's highway density

Louisiana's auto insurance rates are influenced by several factors, including the state's highway density, population, vehicle theft rates, and auto-related lawsuits. The state's highway density, in particular, plays a significant role in the cost of auto insurance.

Louisiana is ranked 25th out of 56 in terms of population, with approximately 4.6 million residents. This high population density contributes to the state's highway density, as more people are likely to be driving on the roads. The state's total area is 52,378.2 square miles, with 82.5% of it being land. This relatively small land area compared to the population leads to a higher density of vehicles on the roads, increasing the risk of accidents and contributing to higher insurance rates.

The state's highway system includes a network of interstate highways, U.S. highways, and state highways. These highways connect major cities and towns within Louisiana, as well as providing access to neighbouring states. The interstate highways, in particular, play a crucial role in facilitating long-distance travel and commerce, contributing to the state's highway density.

Louisiana's highway density is further influenced by the state's geographical location and terrain. The state is bordered by Texas, Arkansas, and Mississippi, with a coastline along the Gulf of Mexico. This central location within the Deep South region makes it a hub for transportation and trade, increasing the number of vehicles on the roads. Additionally, the flat and low-lying terrain of much of the state makes it easier for people to drive longer distances, contributing to highway density.

The combination of a high population, limited land area, geographical location, and terrain factors results in a dense highway network in Louisiana. This density increases the risk of accidents and contributes to higher auto insurance rates in the state. The state's highway system plays a vital role in connecting communities, facilitating trade, and supporting the state's economy, but it also comes with the cost of higher insurance premiums for residents.

Population size

Louisiana's population is a factor in its high insurance costs. With roughly 4.6 million residents, it is the 25th most populous state in the US. The population density is fairly modest, with an average of around 105 people per square mile (40.5 per square kilometre). However, there are "hotspot" areas of population, mostly grouped around major cities.

New Orleans, the largest city in the state, has a population of about 383,000 people. Its metropolitan area had an estimated population of 1.285 million in 2016, with a population density of 1,965 people per square mile.

The state's population is growing, with a growth rate of 0.75% annually, ranking 27th in the country. This growth is expected to continue, with estimates suggesting the population will surpass 5 million by 2030.

The population of Louisiana is diverse. The state has the second-highest percentage of African Americans in the nation, only trailing behind Mississippi. A high percentage of Cajuns and Creoles live in the southern portion of the state, and there is a significant number of Hispanics, including the third-largest Honduran American community in the country, located in metro New Orleans.

The state's population also reflects its history. Louisiana was a French colony and later a Spanish colony, and it was purchased by the US in 1803. Today, 3.5% of the population speaks Spanish at home, while 3.4% speak French, including Louisiana Creole and Cajun. A total of 8.6% of the state's residents speak a language other than English at home.

The population of Louisiana is relatively young, with a median age of 36.2 years. The state also has a slightly higher percentage of females, with 51.1% of the population, compared to 48.9% males.

Vehicle theft rates

Vehicle theft is a significant factor contributing to high auto insurance rates in Louisiana. The state's auto insurance rates are more than double the national average, and vehicle theft is a critical component in determining these rates.

Motor vehicle theft, carjacking, and joyriding are all serious crimes in Louisiana, with harsh penalties for those convicted. The state categorises vehicle theft based on the value of the stolen property, and the penalties increase with the value of the stolen vehicle. For instance, theft of a vehicle valued at less than $1,000 is a misdemeanour, while theft of a vehicle valued at $1,000 or more but less than $5,000 is a felony, punishable by up to five years in prison and a $3,000 fine. The penalties continue to escalate with the value of the stolen vehicle, reaching up to 20 years in prison and a $50,000 fine for vehicles valued at $25,000 or more.

Additionally, Louisiana has specific laws targeting the theft of catalytic converters or engine control modules from vehicles, with penalties based on the value of the stolen property and any related damage. The state also recognises the unauthorised use of a motor vehicle (joyriding) as a separate offence, punishable by up to six months in prison and a $1,000 fine if the value involved is less than $1,000. More severe cases of joyriding are felonies, punishable by up to two years in prison and a $5,000 fine.

Carjacking is another severe form of vehicle theft in Louisiana, involving the use of force or intimidation to take a vehicle from an individual. Carjacking offences carry stringent penalties, including a minimum sentence of 10 years and a maximum of 20 years in prison if serious bodily injury occurs. Other carjacking offences are subject to a minimum sentence of two years and a maximum of 20 years in prison, with no possibility of probation or parole.

Theft of a motor vehicle in Louisiana is defined as taking a vehicle without the owner's permission or by fraud, or taking control of a vehicle known to be stolen, with the intent to permanently deprive the owner of their property. The penalties for motor vehicle theft are consistent with general theft penalties in the state and are based on the value of the stolen vehicle.

The high rates of vehicle theft in Louisiana directly impact the cost of auto insurance in the state, contributing to the overall expense of auto insurance policies for Louisiana residents.

High number of uninsured drivers

Louisiana has some of the most expensive car insurance rates in the country. As of 2017, the average annual premium in the state was $1,921, which was just behind Michigan's average annual premium of $2,394. By 2024, the average car insurance cost in Louisiana had risen to $3,041 per year, more than twice the national average of $1,424.

One of the reasons for these high insurance premiums is the state's high number of uninsured and underinsured motorists. According to the Insurance Research Council, an independent nonprofit, 13% of Louisiana drivers do not have insurance. The Louisiana Department of Insurance put this figure slightly higher at 15%. This means that Louisiana ranks near the middle of the pack when it comes to states with the highest number of uninsured drivers. Mississippi, for example, has a much higher rate of uninsured drivers at almost 30%.

The high number of uninsured and underinsured motorists in Louisiana has contributed to a cycle of high insurance rates and personal injury claims. Because insurance rates are so high, many people cannot afford coverage or only have the minimum coverage required by law. This means that when accidents occur, victims often have to file personal injury lawsuits instead of, or in addition to, insurance claims. The prevalence of personal injury claims leads to higher expenses for insurance providers, who then pass on these costs to their policyholders in the form of even higher insurance rates.

In addition to the high number of uninsured and underinsured motorists, other factors contributing to the high cost of car insurance in Louisiana include the state's highway density, population, vehicle theft rates, low fuel costs, distracted driving, and auto-related lawsuits.

Frequently asked questions