It might be time for Louisiana residents to park their cars or trucks in the driveway for an extended period of time.

A year after approving double-digit rate hikes for at least five insurers, the Louisiana Department of Insurance decided this past week to approve rate increases of at least eight percent or higher for 10 agencies.

Louisiana now has the second-highest auto insurance premiums in the country, only behind Michigan.

How much your insurance will be raised this year depends on your insurer. 

The largest percentage in rate change was granted to Safe Auto Insurance Co., which has 1,934 policyholders in the state, and was approved to increase its rates by a whopping 21.9 percent.

Other insurers that were approved for double-digit rate increases were: Progressive Paloverde Insurance Co. (16.5 pct.),  Allstate Property and Casualty Insurance Co. (15 pct.), Teachers Insurance Co. (14.5 pct.), and Safeco Insurance Company of Oregon (12.1 and 10.6 pct.).

The rate hike that will affect the largest number of residents are those who currently have State Farm Fire and Casualty Co.  State Farm, which has 1,118,054 policyholders in the state, will raise rates by 9.9 percent.

That comes a year after State Farm raised rates by an average of 13.5 percent.

In all, the Louisiana Department of Insurance’s approved rate changes will allow 10 companies to raise rates on possibly 1.5 million residents.

That now makes four straight years that auto premiums have been raised.

So why are Louisiana residents having to fork over even more cash — which has been in short supply since the economy faltered back in 2008 — to insurers?

Louisiana Insurance Commissioner Jim Donelon has publicly cited several factors for premiums in the state being continually raised.  

That includes the state having a high rate of uninsured drivers on the road (15 percent without coverage), many drivers only carrying minimum coverage (40 pct.), a rise in distracted driving (texting, etc.), and affordable gas,  which leads to having more drivers on the state’s roadways which in turn leads to more accidents.

There’s also the lasting effect recent natural disasters have had on insurance rates. For example, the historic flood in 2016 damaged more than 100,000 vehicles. 

Raising rates is to be expected, as insurance companies are in the business of turning a profit, but raising rates is only going to continue to feed a vicious cycle here in Louisiana.

Higher rates will result in more people dropping coverage all together or reducing the amount of coverage, which will then further raise rates next year and the year after. 

So how can we make auto insurance more affordable here? And since we can’t control Mother Nature, there are only a few things that we can do. One of them is being more diligent on the road.

How can we do that? By putting down our phones, our fast food burgers, our drinks. Focus on the road and nothing else.

If we don’t start doing our part, there will come a day when a good majority of us won’t be able to afford to drive on the roads. 

 

RAYMOND PARTSCH III

MANAGING EDITOR