Louisiana auto insurance at a crossroads

Louisiana drivers pay the third highest expenditures for auto insurance in the country (with N.J. taking second and D.C. taking the top honor). On average, consumers pay $1,096 a year for their insurance. This Friday it will get even more expensive as the new minimum coverage mandate is adjusted. The reason for the increase, among other things is due to the rising costs for medical care and accidents.

While the actual amount of increase is likely to be minimal (an additional $71 per year per policy according to the chief actuary for LA’s dept. ) the unintended consequence (as noted in the NYT article) could be the reduction in auto coverage state-wide not an increase. The folks who couldn’t afford more insurance before the mandate still won’t be able to afford it and instead of pinching pennies somewhere else in their budget they may choose to drop coverage all-together increasing the deficit of coverage in Louisiana–not increasing coverage.