Max Dorfman, Research Writer, Triple-I
Louisiana’s private auto insurance coverage affordability improved to 2.67 % of median family revenue in 2022 – down from 2.93 % in 2020 – however it retains the doubtful distinction of being the least inexpensive state, Triple-I’s chief insurance coverage officer advised the Louisiana House Insurance Committee in latest testimony.
Dale Porfilio – who is also president of the Insurance Research Council (IRC) – stated that by almost each metric the state’s insurance coverage price drivers are properly above the nationwide common:
- Accident frequency – Louisiana is 16 % larger than the nationwide common;
- Repair price severity – Louisiana is 9 % larger;
- Injury declare relative frequency – Two out of each 4 property harm claims (when automobiles hit automobiles) in Louisiana end in bodily damage claims (49 %), twice the one out of each 4 (25 %) throughout all states;
- Medical utilization – Louisiana is 47 % larger;
- Attorney involvement – Louisiana is 24 % higher;
- Underinsured motorists – At-fault drivers in Louisiana have inadequate legal responsibility insurance coverage limits in over 35 % of multi-car accidents, over twice the 16 % U.S. common; and
- Claims litigation – Litigation over private auto claims in Louisiana is greater than twice the nationwide common, surpassed solely by Florida.
Porfilio famous that for auto insurance coverage affordability to enhance, general anticipated losses will must be diminished. Legislation to scale back a number of of those key price drivers could be useful, Porfilio stated.
As Triple-I and IRC beforehand reported, the mixture of excessive insurance coverage expenditures and low median revenue make Louisiana a troublesome state through which to decrease prices. The frequency of hurricanes hitting the state will increase householders insurance coverage prices, and the excessive price of reinsurance has contributed to the Louisiana’s insurance coverage woes.
In truth, in 2020 and 2021, within the wake of Hurricane Laura and Hurricane Ida, insurers paid out greater than $23 billion in insured losses from over 800,000 claims filed.
While Louisiana policymakers had been assured a $45 million fund authorized in February 2023 to encourage insurers to write down property insurance coverage enterprise within the state would assist stabilize the market, insurance coverage commissioner Jim Donelon acknowledged that the authorized grants are solely step one towards decreasing householders’ insurance coverage charges.
As Porfilio’s testimony demonstrated – and the market has dictated – extra work is required to decrease prices for shoppers and insurers in Louisiana.