I’d “build me a bar in the back of my car and drive myself to drink” – if I had to buy auto insurance at Louisiana rates!

Insur.com has new data on an interactive application “that ranks the states according to their average insurance rates”  and Yahoo Finance had the New York Times story, Where Auto Insurance Is Most Expensive:

Louisiana has the highest average auto insurance rates in the United States, while Maine has the lowest, according to new data from Insure.com that ranks the states according to their average insurance rates. (ranked list below the jump)

The data…comes from a study Quadrant Information Services performed for Insure.com to find the most and least expensive vehicle to insure nationwide, which we covered in a March Bucks post. The data, which determined average insurance premiums rates for more than 2,400 vehicles from the 2010 model year from six large carriers across 10 ZIP codes in each state, also enabled a comparison of auto insurance rates in general across the states.

What’s behind states’ different rates?

According to Insure.com, states’ different laws are partly to blame. “Our findings show that the financial ramifications of specific state laws and regulations are driving high rates in certain states,” Amy Danise, senior managing editor of Insure.com, said in a statement. “No matter how good your own driving record is, you’re paying for the decisions of lawmakers.”

Insure.com discovered from talking with insurance agents that the states at the top of the list have certain regulations that drive up rates in those states…In contrast, population levels may be why certain states are at the bottom of the list. According to Ms. Danise, the states with the lowest insurance costs tend to be more rural. Maine, for instance, may have low auto insurance rates because its highways are less crowded, which may mean fewer crashes over all.

According to Insure.com’s website, “only cases with claims in excess of $50,000 receive a jury trial…in Louisiana.”

When asked about Louisiana’s No. 1 ranking, two insurance agents there said they were disappointed but not surprised. And they had a ready explanation: the state’s court system.

“You see lots of settlements at $49,000,” explains Duane Dimattia of Baton Rouge, a director of the Professional Insurance Agents of Louisiana. That sweetens the pot for seeking a claim against an at-fault driver – and insurance companies pay the tab.

With the state’s judges elected rather than appointed, those settlements tend to cater to the public more than they do to legal facts, asserts Richard Clements, a past president of the Independent Insurance Agents of Greater New Orleans.

While an estimated 125,000 vehicles were crushed at Louisiana junkyards in the wake of 2005’s Hurricane Katrina, Clements says that’s not a factor in the state’s high rates. “We really can’t point our finger at Katrina on that, even though we can point to it for many other things.”

In addition to the monetary threshold for jury trials, Dimattia says, Louisiana has traditionally had higher bodily injury rates and more lawsuits per capita than most states. He blames both on the state’s aging roads.

Michigan is in second place on the ranked list of state auto insurance rates:

Like many states, Michigan requires all drivers to have car insurance. Unlike any other state, it offers unlimited medical benefits for the life of accident victims — no matter what policy they buy. Under the system, an individual’s insurance carrier covers the first $460,000 in benefits. Above that amount, a statewide pool (called the Michigan Catastrophic Claims Assessment) kicks in, which affects the rates of everyone in the state.

“That’s where our biggest expense is,” explains Jon Spalding of Perry, Mich., president of the National Association of Professional Insurance Agents . “If I’m sitting at a stop sign and a motorcycle rear-ends me, my auto policy pays for that motorcyclist’s medical benefits.”

In fact, because of this personal injury protection (PIP) coverage, car insurance has become the primary source of medical coverage, says Spalding.

Michigan’s unemployment rate of nearly 15 percent, the highest in the nation, also plays a role in the state’s car insurance rates. More and more residents are letting their car insurance lapse despite the mandatory coverage law. “It’s a gamble and it can be an expensive one if they get caught,” says Spaulding. But “they’re absolutely willing to take that risk.”

Maine, “a large rural state with just 1.3million residents” has the nation’s lowest rate:

The largest city, Portland, has just 62,000 residents. The upshot: The average number of annual miles driven is low, commuter mileage is low, and, relative to other states, the Pine Tree State’s highways are not that busy. This helps hold down car crash claims.

Despite its small population, Condon notes that there are at least 30 insurance carriers in the state, so there’s plenty of competition for customers’ business.

But Condon says Maine’s insurance advantage goes beyond just numbers. “It’s a real proud culture,” he explains. In most disputes, Mainers tend to seek fair treatment rather than big money.

Before you let the cost of auto insurance cause you to consider building “a bar in the back of your car”, read more about the ranking and check out the inactive rate comparison tool (toy) at Insure.com.

10 thoughts on “I’d “build me a bar in the back of my car and drive myself to drink” – if I had to buy auto insurance at Louisiana rates!”

  1. Yes! We Have A Winnaaaaahhhh!
    This is the Best Title Yet! —and you know that’s saying something here in the Village of the Slabbed where Title is Everything and Policy Ain’t Wort’Nuttin!
    Hahahahahahahahaha Yes!
    Oh Doucy, I was just waiting around for Monday to get it’s damn Act together and here you are makin’it Bacon!
    Thanks youz!

  2. Part of my “college education” and the credit goes to the Nitty Gritty Dirt Band, Editilla – came to mind because I haven’t been able to keep my bubblegum in my mouth lately (too full of foot).

    “I just talked to the weatherman.
    It’s gonna rain on me today.
    I dropped my bubblegum in the sand,
    And I had to throw it away.
    I got out of bed, sratched my watch and wound my head.
    I’m so mixed up that I can’t think.
    I’m gonna build me a bar in the back of my car,
    And drive myself to drink, sha-la,
    Drive myself to drink.

  3. Not surprising at all. Many CDC judges are solidly pro plaintiff bar and insurers are often in for some home cookin in rural jurisdictions. Then there are the so called courts of limited jurisdiction ie pineville city court, Alexandria city court where the jd limit is like 50k right now. Jury isn’t even an option. 40k for a six month soft tissue injury is ridiculous.

  4. Right, the cheating judges are victimizing the poor insurance companies and causing rates to be higher in La. than anywhere else. Louisiana has more restrictive, insurer-friendly tort laws than you will find in most states. Overall, Louisiana is very conservative and there is probably little correlation between verdicts and insurance rates.

  5. Sock your joking right? Just look at what has been posted on this site over the last year. True or not everyone has jumped on the corrupt plaintiff attorney having TGW enroll just to get an advantage against a defendant

  6. Ignatius, I can indeed have it both ways because it works both ways. This is what I do for a living (maybe you do too), and I have seen just as many good cases shut down by judges who are beholden to the insurance industry and/or their lawyer-buddies who represent the insurance companies. This is not exclusive to plaintiff lawyers. And I’m not sure what the Porteous-Liljeberg case has to do with this; it was a business dispute, and I would seriously doubt it had any impact on insurance rates in La.

    I agree with you that corrupt judges should not be tolerated, but that goes both ways. You imply that only plaintiff lawyers benefit from judges’ untoward conduct. If you believe that corrupt judges have a direct correlation with high insurance premiums, please show me the data/evidence. Maybe it has to do with the fact that La., particulary New Orleans, has more uninsured drivers per capita than other states/cities.

  7. Data “talk” and, in this data set, Louisiana data “scream”. If you take Louisiana off the chart, what you have is a fairly typical ranked list of states on any indicator.

    As you move down the list, there is no other “gap” – just a gradual $1 here, $20 there decrease.

    Not only are Louisiana rates over $400 higher than the next closest state, the “Louisiana gap” grows to over $1000 when the national average is considered – $1429.26.

    In other words, the gap between Louisiana and the national average is greater than the cost of auto insurance in over 20% of all states.

    When the cost of insurance makes it difficult for people to have the reliable transportation needed to obtain and retain employment, it literally makes Louisiana a “breeding ground” that produces the state’s high rate of child poverty – which, in turn, accounts for an entirely different set of costly problems.

    The best way to address all of these problems and jump start the economy is through the cause of the high rates – the legislation – and to understand that you have to look at the $50,000 threshold in the context of the reality of the “working poor” and the relatively minor accident that can total a car nowadays.

    I suspect Louisiana has a significant problem with fraudulent claims as a result of legislation that forces settlement. In other words, to obtain the full amount of covered damage, the amount of damage has to been inflated because it will be reduced in settlement.

    Lawyers could own every judge in the state and it wouldn’t change a thing. However, if they worked together and removed the legislatively-established barrier to a jury trial, I believe insurance rates would come down and employment rates would go up.

  8. I can dig what you’re saying. I agree that the jd threshhold for pi cases in district court should be done away with. At the same time jd threshold in city or parish courts should be reduced to 20k or so. You got a small claim, bring it to city court. I agree too that part of the problem here is the number of uninsured drivers. That absolutely harms the insurers subrogation rights when it pays it’s insured um benefits. I also think that increasing the no pay no play limit and casting plaintiffs with costs if a bogus suit is filed is fair

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