Chance Ryan / Houma Courier
Louisiana's auto insurance rates remain the highest in the nation, according to industry studies.
A March report from Insure.com, an insurance industry website, shows Louisiana's average auto insurance rates at $2,699 annually, followed by Michigan at $2,520 and Georgia at $2,155.
By comparison, the national average for car insurance premiums in the U.S. is a little more than $1,500.
This is the third year in a row Louisiana tops the list. Before 2011 it held the No. 2 spot for years, industry reports show.
Maine enjoys the least expensive car insurance rates, at $934 per year, followed by Iowa, $1,028.
A variety of factors dictate how costly auto insurance will be state by state, the report says. Such as the number of insurers competing for business, driving conditions, the portion of uninsured drivers and the way state insurance systems are set up.
Compared to the rest of the country, the study notes that Louisiana drivers who get in wrecks file more injury claims than motorists in other states.
Louisiana also has a high rate of natural disaster damage.
Blue Bunol, general manager for ABC Insurance, a local auto insurance agency with 62 locations throughout Louisiana and Texas, said the litigious nature of people in the state make it difficult for insurance companies to keep costs low.
Louisiana faces issues with high insurance costs because of poor roads and natural disasters, Bunol said. But it's also the personal injury lawyers who advertise heavily on television and on bus stop benches, and the state's direct-action law, which allows people to sue insurers directly.
Louisiana is ranked 13th in the country for attorneys per capita, with 11.1 lawyers per 10,000 residents, according to AveryIndex.com, a law and rankings website.
The state's relatively poor population sees this aggressive advertising, Bunol said, many of which (about 13 percent) don't have car insurance and are more inclined to wring whatever they can out of an insurance policy.
'Attorney advertisement entices people who are looking for a handout to call whether their accident warrants it or not,' he said. 'Then the attorneys build a claim around nothing. Many of these claims are turning into a feeding frenzy.'
Louisiana has the highest frequency of bodily injury claims, according to a report by the Insurance Research Council.
Bunol said drivers can still get good deals if they rely more on insurers, like ABC, who offer mixed packages that drive competition.
He also noted that high car insurance rates are not necessarily statewide. The highest rates are largely concentrated in the New Orleans metropolitan area.
For example, a 21-year-old male with a clean driving record who drives a 2005 Toyota Corolla pays $246.05 per month for basic insurance in New Orleans, according to ABC quotes. Using that same sample, the monthly cost would be only $176.54 in Houma.
Bunol said another factor that contributes to the high costs is the high level of alcohol consumption in Louisiana.
'You don't have many states where you can drive though a daiquiri place and get a highball and a beer to go,' he said.
Deplorable road conditions, as a result of the soft nature of the soil, contribute to the costs as well, he said.
'So you got poor streets and more people drinking and driving yeah, that's going to increase the frequency of claims.'
Melissa Landry, director of Louisiana Lawsuit Abuse Watch, a nonprofit judicial-reform organization based in Baton Rouge, said a unique law in Louisiana, which dictates that civil claims under $50,000 must be decided by a judge, not a jury, is unfair to residents and insurance companies.
It puts more power into the hands of elected judges, Landry alleges. And that may encourage some contingency fee attorneys who make a living based on court outcomes to seek out judges who have a track record of siding with plaintiffs the people living in the communities they serve more than insurers they sue.
While Landry does not want to paint the judiciary with a broad brush, she said it's clear that money contributed to judicial elections may at times add an element of political pressure that juries don't experience.
'In recent analysis of civil jury trial threshold limits for all 50 states, Louisiana Lawsuit Abuse Watch found that the vast majority of states have no threshold for civil jury trials, and among 14 states that do, Louisiana's threshold is by far the highest in the nation,' Landry said. 'At $50,000, Louisiana's jury trial threshold is roughly more than 28 times the national average of $1,742.40.'
The $50,000 threshold was enacted during the last administration of former Gov. Edwin Edwards in 1993 in an effort by legislators to prevent overburdening the courts with more bureaucracy and increased government spending for assembling juries and other costs.
In various reports, legislators have said people who come for jury duty do not want to waste time for minor traffic claims. And if the trial threshold were to be lowered, even more civil jury trials will take place, which will create longer delays in an already backed-up judiciary system.
'It is unfair to ask the citizens of Louisiana to serve on juries for small claims that can be effectively and efficiently handled by judges and have been for years,' Michael L. Barras, a personal injury attorney in New Iberia, wrote on his website.
Bunol said the truth is insurance companies don't really care how high the rates go nor do legislators because it all evens out in the end.
'They look at it as another form of welfare,' Bunol said. 'Instead of tax dollars distributed as welfare, it's insurance dollars that are simply paid by the public anyway same as tax dollars. Insurance companies are going to pay the claim and ultimately change their rate accordingly. But all of us who pay high insurance rates should be screaming at the legislators to make stiffer laws to keep these attorneys from being able to build up a claim that should have never existed in the first place.'