5 States with Unusually High Auto Insurance Rates


1
Louisiana

Planning to insure your car in Louisiana? You might have to think about opening a new line of credit, because the Bayou State is far and away the most expensive state in the country to insure a vehicle. The average auto insurance premium in Louisiana is a whopping $2,536 per year, according to data from the Insurance Research Council; that's nearly double the median in the U.S., and it's almost three times as much as Maine, which is currently the cheapest place to insure a car. Louisiana is also home to New Orleans, which in 2012 was the third most expensive city in the country, with the average premium in that city costing $3,599 per year.

Why does auto insurance cost so much down by the bayou? Insurance companies blame the state's judicial system. Louisiana requires claims to reach $50,000 before they head to juried trial, and anything under that is resolved by an elected judge, who, out of self-preservation, is more likely to side with a voting constituent than an insurance company. Or so the theory goes. Because of that law, many cases are reportedly settled for $49,000, which of course drives up costs for insurance companies [source: Loose]. Additionally, the recession has been as hard on Louisiana as any state, meaning that many people, out of desperation, end up driving without insurance. For some people it comes down to "whether to keep insurance or put food on the table," Brad Bourg of Bourg Insurance Agency in Baton Rouge told Insure.com [source: Marquand].

Author's Note: 5 States with Unusually High Auto Insurance

Car insurance is a topic that I don't typically spend a lot of time thinking about, so this was a bit of a learning experience for me. I recently moved from a large city to a more rural area that thankfully isn't located in any of the states that made this list, and my insurance premium dropped considerably. The irony of it is that I don't feel like I've become less "risky" since moving away from the city; in fact, because I depend on my car to get almost everywhere now, I'm probably at a much higher risk of getting in an accident. So take that, insurance companies!

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Sources

  • Ballenger, Brandon. "7 Ways to Save on Car Insurance." Money Talks News. May 23, 2011. (March 20, 2012) http://www.moneytalksnews.com/2011/05/23/7-ways-save-car-insurance/
  • Edgerton, Jerry. "Auto Insurance Costs: Where Does Your State Rank?" CBS News. March 14, 2011. (March 24, 2012) http://www.cbsnews.com/8301-505145_162-40542496/auto-insurance-costs-where-does-your-state-rank/
  • Insurance Information Institute. "Auto Insurance: Costs and Expenditures." (March 20, 2012) http://www.iii.org/facts_statistics/auto-insurance.html
  • Loose, Terence. "Most Expensive Cities for Car Insurance." Yahoo. (March 22, 2012) http://education.yahoo.net/auto-insurance/articles/most_expensive_cities_for_car_insurance_alt.htm
  • Marquand, Barbara. "Car insurance rates by state: The most and least expensive places to buy auto insurance in 2012." Insure.com. March 5, 2012. (March 20, 2012) http://www.insure.com/car-insurance/car-insurance-rates.html
  • Mothershead, Robert E. "State should take action on uninsured motorists." The Journal. July 2, 2011. (March 22, 2012) http://www.journal-news.net/page/content.detail/id/564132/State-should-take-action-on-uninsured-motorists.html?nav=5061
  • Saranow Schultz, Jennifer. "Where Auto Insurance Is Most Expensive." The New York Times. April 12, 2010. (March 24, 2012) http://bucks.blogs.nytimes.com/2010/04/12/where-auto-insurance-is-most-expensive/
  • Schultz, E.J. "How the Insurance Industry Got Into a $4 Billion Ad Brawl." Advertising Age. Feb 21, 2011. (March 24, 2012) http://adage.com/article/news/insurance-industry-s-4-billion-advertising-brawl/148992/

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