Car insurance US’s 2nd highest. Why?

For many Louisiana families struggling with a tight budget, it’s not good news to learn that the cost of operating a car is higher here than almost every other state in the country.

Over the last several years, Louisiana’s auto insurance rates have climbed steadily and are now the second highest in the U.S., behind only Michigan. According to a new study by Insure.com, Pelican State drivers pay an average premium of $2,453 a year. Now that’s a lot of dough. At a time when food prices keep going up and the weekly paycheck doesn’t stretch nearly as far as it used to, it’s not hard to imagine what else Louisianans could be doing with that money.

So why do you think we pay so much? Bad roads? Too many accidents? Lots of uninsured drivers? These may all be contributing factors, but according to the National Association of Insurance Commissioners, a group of state regulators, one of the main reasons for Louisiana’s sky-high auto liability premiums is the loose nature of our laws.

For example, our state is one of the few places in the country that has a jury trial threshold of $50,000. That means when a lawsuit is filed, you cannot get a trial before a jury unless the claim is more than $50,000. Many suits filed as a result of automobile accidents are less than $50,000, so these cases are decided by judges, many of whom are fair but some of whom may tend to side with the local people who elect them rather than the insurer, sometimes regardless of who is right or wrong. In the short term this may not seem like a problem, but in the long run it’s clear this system leads to more expensive outcomes, which leads to more expensive car premiums for all. That’s not fair.

We need to get rid of Louisiana’s $50,000 threshold and give everyone the right to choose a trial before a jury to help ensure that lawsuits can be settled based on their merits. This simple change would put Louisiana back in line with many other states. It would also improve the system overall and help to bring down rates for everyone.