Why Louisiana’s Auto Insurance Rates Keep Climbing

LAFAYETTE, La. (KPEL News) — If you’re a Louisiana driver, you’ve probably noticed that your auto insurance bill seems to climb higher every year. And you’re not imagining things — Louisiana consistently ranks as one of the most expensive states for car insurance in the country.

According to a 2024 report by the Insurance Research Council, the average annual cost for auto insurance in Louisiana was $1,588 per vehicle, nearly 40% above the national average. But why? What’s driving these sky-high rates? Let’s take a look.

1. High Frequency of Injury Claims and Litigation

Ever noticed how many billboards advertise personal injury lawyers? There’s a reason for that. Louisiana has the highest rate of bodily injury claims in the U.S., and people here are nearly twice as likely to file those claims as drivers in other states.

Louisiana Illuminator reports that this litigious culture doesn’t just impact those involved in accidents. It hits everyone in the wallet. Insurers pass those costs onto policyholders, which is why your premiums keep going up.

2. Uninsured Drivers Are Raising Your Rates

Louisiana has one of the highest rates of uninsured drivers in the nation, around 14%. And when uninsured drivers get into accidents, those costs get spread out among everyone else.

READ MORE: Insurance Rates in Louisiana Are Awful - DUIs Can Make Them Worse

According to On My Side, insurers compensate by charging higher premiums for uninsured/underinsured motorist coverage, which most drivers end up paying for, whether they realize it or not.

3. Credit Scores and Car Insurance — What’s the Connection?

Did you know that in Louisiana, your credit score can determine how much you pay for car insurance? People with poor credit can pay up to 111% more than those with stellar credit, even if they have clean driving records.

Real Reform Louisiana argues that this practice is not only unfair but also disproportionately affects low-income drivers who are already struggling to make ends meet.

4. Hurricanes and Floods Drive Up Premiums

If there’s one thing Louisiana is known for, it’s hurricanes. With a reputation for severe weather, it’s no surprise that comprehensive auto insurance claims are higher here.

According to Bloom Legal, every time a major storm hits, insurers pay out millions in claims for flood-damaged vehicles. And those costs are inevitably passed down to policyholders.

5. Opaque Rate-Setting Practices — What Are Insurers Hiding?

Right now, Louisiana law allows insurers to keep their rate-setting methods secret. That means there’s little transparency around how companies decide what to charge you.

Louisiana Illuminator reports that Governor Jeff Landry wants to change that with new legislation that would require insurers to disclose how they set their rates. Could this finally bring some accountability to the industry?

6. Lawsuits, Lawsuits, and More Lawsuits

You can’t drive down I-10 without seeing billboard after billboard for personal injury lawyers. And that aggressive legal advertising isn’t just annoying — it’s costing you money.

Louisiana Illuminator notes that Governor Landry has proposed limiting such ads to cut down on frivolous claims, which drive up litigation costs and, by extension, insurance premiums.

7. Low Incomes, High Costs

Here’s the kicker — Louisiana ranks 48th in the nation for median household income, but our car insurance rates are some of the highest. That’s a tough combination for families trying to make ends meet.

Real Reform Louisiana highlights how the economic strain is forcing some drivers to drop coverage altogether, which only makes the problem worse for everyone else.

What Can Be Done About It?

So what’s the solution? State officials are floating several ideas:

• Make Rates Transparent: Require insurers to disclose how they calculate premiums.
• Limit Credit Score Impact: Reduce the influence of credit scores on insurance rates.
• Curb Legal Ads: Restrict personal injury advertising to prevent frivolous lawsuits.
• Reward Safe Drivers: Offer more discounts for defensive driving courses or dashcam installations.

But whether these proposals gain traction — and whether they’ll actually lower rates — remains to be seen.

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