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Louisiana Families Feeling Pain of Insurance Crisis, Survey Shows

June is the beginning of the hurricane season and the end of the legislative session in Louisiana. As storms form in the gulf, big insurance companies continue to push industry-friendly legislation that disadvantages consumers, making it easier for insurance companies to raise costs, delay claims, and ultimately deny storm victims the money they need to rebuild their lives.

Louisiana desperately needs real insurance reform that benefits consumers by increasing competition, lowering costs, and increasing accountability for big insurance companies. Louisiana families are hurting, as evidenced by a recent survey conducted by the Reilly Center for Media & Public Affairs at LSU.

63% of Louisiana homeowners report that the cost of insurance increased. Only 3% reported paying less for homeowners insurance. Nearly 7 out of 10 respondents said insurance in Louisiana costs more than in other states.

17% of Louisiana homeowners report that their insurer canceled their policy over the past year. That's nearly one-fifth of every Louisiana adult reporting that their homeowner's insurance coverage was canceled. Over half (55%) of the Louisiana homeowners who tried to find an insurance policy last year experienced difficulty getting coverage.

Roughly 1 in 5 adults have filed a property, flood, or renters insurance claim in the past two years, which accounts for 29% of all Louisiana policyholders. 48% of policyholders report dissatisfaction with how their insurance company handled their claims.

Louisiana families are also frustrated with broken promises. Two years ago, we were promised tort reform would lower automobile insurance rates. But only 10% of auto insurance policyholders reported paying less in the survey, while a plurality (43%) reported paying more.

Now, the same people that promised tort reform would lower auto insurance rates are pushing the same false promise about property insurance. Tort reform will not lower home insurance premiums, as evidenced by the spiraling crisis in Florida.

The Sunshine State has passed several aggressive tort reform packages over the past two years. Yet, Florida's insurance rates are four times higher than the national average and insurance companies are defrauding policyholders at an alarming rate.

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By Ben Riggs • February 16, 2024

Insurance Industry: "Credit Scores" Among Reasons for Louisiana's Rising Insurance Costs. A new report shows that auto insurance rates are skyrocketing, rising by 26% across the U.S. On average, Louisiana drivers pay $2,909 annually, roughly 6.53% of their income for auto insurance. Wayne Watley at Watley Insurance Group lists “credit scores” among the reasons for Louisiana’s rising auto insurance costs, including poor roads and uninsured motorists. Mr. Watley goes on to say, “It’s a challenge because we’re not one of the richest states, but we have some of the highest premiums.” He is correct—and the data backs him up. Insurance companies use credit scores to determine insurance rates for policyholders. Louisiana ranks 48th in median household income and 49th in average credit score . According to a recent study , safe drivers in Louisiana with poor credit pay 111% more than safe drivers with excellent credit ($1,505 / $713). Consequently, Louisiana has the second-highest auto insurance rates in the nation, which leads to more uninsured motorists, another primary cause of higher insurance rates. The use of credit scores in rate setting also creates perverse incentive structures that make Louisiana roads less safe. In Louisiana, safe drivers with poor credit pay an average of $905 more than drivers with a DWI and excellent credit ($3,548 / $2,643). Meanwhile, traffic fatalities increased by 21% from 2019 to 2022 in Louisiana, and the fatality rate per 100 million vehicle miles traveled increased by 18%, according to KPLC . Louisiana desperately needs real insurance reforms that lower costs, protect consumers, hold insurers accountable, and make our roads safer.