Legislators continue to dig into the challenging market for property and auto insurance in Louisiana and the topic is expected to be a major focus of the 2025 Legislative Session. For a new data report series for 2025, Leaders for a Better Louisiana collected available information on insurance factors. These may be useful for citizens, business owners and policymakers who are working on potential solutions regarding Louisiana’s high auto insurance premiums. See the full report of data here.
The data indicate that Louisiana’s auto insurance premiums are the highest out of all Southern States and are significantly above the national average. Louisiana residents pay roughly $500 more on average than the U.S. average for auto insurance premiums. Compounding the issue, Louisiana incomes are $16,250 lower than U.S. incomes annually.
A key factor contributing to these high costs is the disproportionately high number of bodily injury claims. Louisiana has three times the number of bodily injury insurance claims and twice the amount of losses, compared to the national average. To illustrate, Louisiana makes 204% more bodily injury claims than the national average, but only 39% more property claims. Losses due to bodily injury claims are twice as high as the U.S. average. The rates of bodily injury claims and losses are substantially out of proportion to property claims and losses.
It’s important to note that accident rates alone don’t fully explain the high premiums. Other states – Mississippi, South Carolina, Arkansas, and Alabama – have higher rates of fatal accidents but lower premiums.
Furthermore, Louisiana’s premiums are higher than what standard factors would predict. Urban population, miles driven, and disposable income are typically cited as factors that affect rates. Despite average rankings on these three variables, Louisiana has the highest premiums. If Louisiana ranked 9th as projected based on these variables, residents would pay $500 less per year.
Several indicators stand out when assessing Louisiana’s auto insurance costs. Louisiana’s rate of claim litigation is almost four times the U.S. average. Additionally, 49% of accidents in Louisiana lead to a bodily injury claim, compared to 26% for the U.S. average. Accident frequency is only slightly higher than the national average (9.9%), but the tendency to file an auto injury claim was significantly higher than in Southern states.