The state of Louisiana has the nation’s second most expensive car insurance, a survey by Insure.com discovered. People in the state pay 46% more than the national average for insurance; or $1,921 a year.
Strangely enough poverty is the major reason why auto insurance is so expensive in Louisiana, The Daily Comet reported. Around 14% of the state’s drivers are uninsured and 40% those with insurance only have the minimum rate level of coverage mandated by state law.
A related problem is that it is real easy to sue insurance companies in Louisiana and even easier to win. A big reason why suing the insurance company is so lucrative in the state is that courts are controlled by elected judges who are often in thrall to personal injury attorneys. That leads to more claims and higher premiums.
Lack of health-insurance is another major cause of high insurance rates. Persons who get injured in accidents have no choice to but sue to get money to pay their medical bills.
How Poverty and Cheap Gas Lead to Sky-High Insurance Rates
Cheaper gas is another problem because it puts more vehicles on the road leading to more distracted drivers and more accidents. Around 27,000 people were injured in accidents caused by distracted driving in Louisiana last year.
There is also a vicious cycle related to high rates and uninsured driving. High rates make insurance unaffordable for many people; but they still have to drive because they need to work or get places like the doctor or the grocery store. More uninsured drivers on the roads leads to higher rates which leads to more driving without insurance.
People in Louisiana are better off than they were just a few years ago. Back in 2010, 2012 and 2013 they had the nation’s highest vehicle-insurance rates. Once again, it is clear that driving habits and accident rates have little or nothing to do with the cost of insurance. For most Americans the zip code is the most important number on the insurance bill.