Once again, the myth that Louisiana automobile insurance rates are high only because of its number of accident-related lawsuits has been echoed in recent media ads by some of our gubernatorial candidates. And, as always, other contributing factors have been omitted. Forbes magazine recently published an article about high insurance rates across states. Their conclusion was, and I quote, "Louisiana’s insurance rates jumped by 19% from last year, to an average annual premium of $2,839, about double the national average, partly because of its large number of uninsured and under-insured drivers – about 11.7% of drivers in the state are currently uninsured."
If Louisiana would get tough about enforcing the uninsured motorist laws, insurance rates would drop. Instead, our legislators pass laws making it easier to avoid insuring a vehicle; like mandating that a vehicle only needs to be inspected every two years instead of yearly. Consequently, you only have to show proof of insurance once every two years instead of yearly to get an inspection sticker. Also, our esteemed legislators passed a law limiting the rights of those who do use the courts to pursue accident-related costs under the guise that rates would decrease. That did nothing to reduce the increases because amendments that would have required insurance companies to reduce rates a set amount yearly were removed from the law by pressure from the insurance companies. Consequently, our legislators gave financial benefits to these companies with no guaranteed benefits for the policy holders.
Additionally, the majority of the penalties issued by law enforce personnel in Louisiana is simply the placement of a green sticker on a vehicle's rear window when caught by police for not having automobile insurance; instead of immediately impounding the vehicle and taking away the driver's license. The required state minimum liability insurance rate coverage also needs to be raised to address the under-insured problem. People sue because an at fault driver doesn't have enough insurance to cover the victim's expenses resulting from the accident.
Insurance companies by law notify the state when a vehicle is no longer insured, but no immediate action is taken. State troopers need to proceed to the owner's residence and impound the vehicle. There are already some laws on the books to drive down auto insurance costs, just no desire to actually do it by enforcement, coupled with no desire to tackle the under-insured problem. The number of auto accident lawsuits is only the tip of the iceberg for why auto insurance rates are high in Louisiana.
