Jim Brown

Thursday, July 22, 2010
Baton Rouge, Louisiana


The present financial disaster in Louisiana has cost the Louisiana economy almost three billion dollars. Check this figure again. Not three million or 300 million but three billion dollars. And the timing could not be worse. The Bayou state’s economy is on a plunging downward spiral. Education will experience major cutbacks, new construction projects are on the verge of grinding to a halt, and basic government services may come to an abrupt end. So why the huge financial hole? It’s the oil spill, right? Read on.

Sure, the oil castrophe all along the Louisiana coast will have a damaging economic effect on the state’s already dwindling economy. But if the new capping procedure put in place last week holds up, cleanup efforts can quickly become more effective with projections of relative normalcy along the Gulf coast within a year. So the oil spill damage to the economy will hopefully be mitigated, with the continuing financial help from BP and the federal government.

However, there is a different cause of a $3 billion loss to Louisiana citizens that continues year after year with little apparent concern being expressed from a host of responsible public officials.

What if you were to consider moving to Louisiana, but were told there is a mandatory surcharge that applies in no other state, requiring you to pay the sum of $1100 or more, just for the privilege of living there? And every other Louisiana citizen who buys a home and owns a car has to pay the same surcharge. Would you move there?

That is exactly what is happening in Louisiana now. The surcharges are from the cost of insurance, and if you live in Louisiana, you now have to pay the highest premium costs in the nation. And not just by a small amount when compared to other states. Louisiana exists in its own world of escalating insurance costs that are completely out of line with the rest of the nation.

Consider auto insurance. The southern average of states surrounding Louisiana is significantly below the national average. The U.S. national average rate is $1,812 as of April 2010. Mississippi comes in much cheaper at $1,537 (15.2% less expensive than national figures). Alabama is even cheaper at $1,457 (19.6% less expensive). Texas has an average of $1,767 (2.5% less). The Louisiana average rate is $2,245 — a whopping 23.9% above the national average.

When you add up the extra amount of money it takes for a car owner to live in Louisiana compared to the national average, the extra sums paid total $1000. And for the most part, these extra premium costs are sucked away to out of state banks for the benefit of national insurance companies.

What about property insurance? The latest figures show that Louisiana is also at the top of the list for having the highest premium rates. The average national premium for home insurance is $690.62. The south has a higher rate because of the hurricane threat. The average homeowner premium for southern states is $801.75, which is 16.1 % above the national average.

Mississippi, Louisiana’s neighbor right on the Gulf, comes in at $964 (down 5.1% from last year). Texas, which also shares a coast with Louisiana, has an average rate of $932 (down 0.9%). Alabama has a rate of $790, and Florida, with the greatest hurricane exposure in the country, has a higher rate a $980. Florida is regularly chastised by Louisiana insurance officials and legislators as being too reckless with their regulatory approach.

Florida’s rate actually dropped last year, and considering their hurricane risk, the Florida rate is, on average, surprisingly only $980 (down 0.1%).

So how did Louisiana do? The average cost for a Louisiana homeowner continued to be the highest in the country at $1392. This is an increase of 0.2% from last year. No surprise, since Louisiana officials pay scant attention to insurance rates and make little effort to lower them.

Rates in the health and workmen’s compensation fields show the same trends. In the auto and property areas alone, Louisiana property owners are paying some $1100 more than the average of all other states throughout the country.

Are Louisiana public officials, including legislators and insurance bureaucrats, up in arms demanding accountability and confecting a litany of ways to get insurance rates to come down? There’s been nary a peep or a whimper. Insurance issues were hardly mentioned in the most recent session of the legislature.

The cost of insurance is the biggest single drawback to business development in Louisiana. $5 Billion dollars that could be used to fill huge and continuing budget holes is being wasted away. But Nero fiddles while Rome burns. And when the oil debacle is old news, a much greater burden of high and unfair insurance costs will continue to hold back struggling Louisiana for decades to come.


“The way to get started is to quit talking and begin doing.”
Walt Disney

Peace and Justice

Jim Brown

Jim Brown’s syndicated column appears each week in numerous newspapers and websites throughout the South. You can read all his past columns and see continuing updates at www.jimbrownla.com. You can also hear Jim’s nationally syndicated radio show each Sunday morning from 9 am till 11:00 am central time on the Genesis Radio Network, with a live stream at http://www.jimbrownusa.com.

6 thoughts on “Jim Brown”

  1. Re the Slabbed article entitled “Jim Brown’s Weekly Column:A Louisiana Disaster More Costly than the Oil Spill..”

    Horray for this article. No one issue has consumed me more than the ridiculous costs of any type of insurance in Louisiana. For over two years, I have pounded our esteemed State Insurance Commissioner, ‘Do Nothing Donelon’ and, moreover, have spend countless hours hounding both Insurance Committees in the Louisiana State House and the Louisiana State Senate in Baton Rouge.

    But, regrettably, neither ‘do nothing Donelon’ or Chuck Kleckley , Chairman of the Louisiana House Insurance Committee nor Troy Hebert, Chairman of the Louisiana State Senate Insurance Committee will acknowledge or address the disasterous state of insurance costs in this state.

    Prior to the last two Baton Rouge Louisiana Legislative sessions, I have asked both Insurance Committees in the House and Senate as well as my assigned Rep and State Senator (Louisiana Legislature) to address the abysmal state of buying personal lines of insurance for the middle class citizens of this state.

    As stated in Mr. Brown’s comments, yet barely a whimper from anyone of these entities be it from our esteemed Insurance Commissioner’s office nor any remote interests in responding to me from Kleckley or Hebert or anyone in the Louisiana Legislature.

    The cost of insurance to everyday citizens of this state is one of just many many reasons you see the continued departure of young college educated people leaving the state. Moreover, now you see the retired baby boomers now looking to leave the state as well. BTW, retired babyboomers are the largest demographic in this state ( or in any state of the union) and we pay taxes and have disposable incomes. Let them move out of the state and good luck to you politicans with your tax base garnered from the under employed or the unemployed.

    How much longer can we just stand by and let our elected officials continue to address pressing issues in this state by letting them continue to keep their heads firmly planted in their backsides..

  2. OOOOOOOOOOOOOOOOOwweeeeeeeeeee Bunhare, you are right, I would very much like to see an investigation as to how Florida’s average homeowner’s policy can be that much less than Louisiana’s. Especially after all the recent hurricanes to hit them in the last 10 years.Or is it based partially on also crime and frequency of lawsuits( home burglaries, liability lawsuits)? Know why our auto premiums are highest? Answer: “One call that’s all” type lawyers. Come on Donelon, give us some premium relief or we may “relieve you” next election time. OOOOOOOOOOOOwweeeeeeeeeeeee

  3. Interesting stuff! What happens in Lousianna doesn’t stay in Lousianna…and neither does it in California.

    Agnotology is the study of culturally-induced ignorance or doubt, particularly the publication of inaccurate or misleading scientific data. Ignorance is often not merely the absence of knowledge but an outcome of cultural and political struggle.’

    President of the Regents of the University of California, Governor Schwarzenegger, Picks Tani Cantil-Sakauye As Ca Chief Justice ~ Will She Mold Justice For The People of California and the US?

    It is time to say ‘Hasta la vista, Baby’ to the fraud in health marketing that aids to increase profits of the industry affiliates of the US Chamber of Commerce, primarily insurers.

  4. If insurance rates are to be lowered the reason for why they are higher must be addressed. Blaming the current commissioner will not reduce the rates. There is no simple answer.

    I think curious is hitting on some of the reasons. Historically, the legal climate in LA has always been an issue from an insurance standpoint. Until the citizens decide they want the underlying reasons to be addressed nothing will change.

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