Why Louisiana Struggles with the Highest Insurance Costs in the Nation
The Unaffordable Insurance Landscape in Louisiana
Louisiana continues to be the least affordable state for personal auto and homeowners insurance, according to a new report by the Insurance Research Council (IRC). The average annual expenditure for auto insurance in Louisiana was $1,495 in 2020, more than 40 percent above the national average, the report finds. These costs account for 2.93 percent of the median household income in the state, rendering it the least affordable.
Homeowners Insurance: A Costly Affair
Louisianans also pay significantly more for homeowners coverage compared to the national average, with an average annual expenditure of $1,965. These are among the highest rates in the country, representing 3.84 percent of the median household income in the state – 55 percent above the national average. The state has faced multiple major weather events, with extensive litigation following each natural disaster. Rising auto-repair and construction costs, as well as the state’s relatively low household income, have compounded these issues.
The Impact on Louisiana's Economy and Population
These hardships have also influenced a population decline in Louisiana, as individuals and businesses are uprooting and seeking improved affordability elsewhere. Louisiana’s population declined by almost 1 percent in 2022, accounting for nearly 39,000 people, according to a new Census estimate. The state has tried to address these coverage gaps through incentive programs for private carriers and a greater reliance on the state-run insurer Louisiana Citizens Property Insurance Corporation, the last-resort insurance. However, Louisiana Citizens Property Insurance Corporation can be expensive, making it unaffordable for many and especially for the state’s most vulnerable residents.
For readers, it is crucial to understand the factors driving these high insurance costs and consider purchasing insurance from states with more affordable rates. Additionally, investing in disaster-proofing homes and vehicles can significantly reduce insurance premiums.