Legal system drives up Louisiana rates

Louisiana's No. 2 position in Insure.com's rankings does not surprise local agents.

"We've had high rates for a long time now," says Brad Bourg, the president of Independent Insurance Agents & Brokers of Louisiana and president of Bourg Insurance Agency in Prairieville, Donaldsonville and Chauvin, La. "Car insurance premiums are a big part of a household budget. It's incredible what some of these rates are."

Eagan says the state's judicial system pumps up auto insurance quotes.

Lawsuits involving car accident claims for less than $50,000 are heard by elected judges versus juries, who, according to local perceptions, tend to "side with the little guy," Eagan says. Personal injury attorneys advertise heavily on TV, encouraging people who have been involved in car accidents to seek legal representation, which leads to more lawsuits and higher auto insurance rates.

But both Bourg and Eagan say insurance companies have recently stepped up competition -- a good sign for the market. They're pushing hard for more auto business from agents and have been accepting more "risky" customers than in the past.

Oklahoma's wild weather

Oklahoma is struggling not only with uninsured drivers but also with weather that leads to floods of insurance claims. Last year was one of the worst for storms, including a storm in May that dropped softball-sized hail on Oklahoma City.

"Cars didn't just look beaten up," says Denise Johnson, the chairwoman of Independent Insurance Agents of Oklahoma and an agent at ECI Agency in Piedmont, Okla. "They looked like someone had taken a sledgehammer to them. All the windows were broken out."

Vermont sensibilities freeze out high prices

John Handy, the president of Vermont Insurance Agents Association and principal of The Essex Agency in Essex Junction, Vt., says Vermont's rural sensibilities and lack of traffic congestion help keep rates low.

"Because Vermont is still not thought of as a particularly litigious state, we have a lot of auto insurance carriers vying for a fairly small piece of the pie," he says. "And despite our long, hard winters, Vermont drivers are a seasoned lot. We tend to hunker down and stay off the roads."

All that hunkering down keeps crashes and claims low.

South Carolina rates get some sun

Car insurance prices haven't always been affordable in South Carolina.

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G. Frank Sheppard, the president of Independent Insurance Agents & Brokers of South Carolina, says today's low rates stem from a 15-year effort to make the insurance market more competitive.

Starting in 1996, the state changed its regulations, giving car insurance companies more flexibility to base rates on driver risk and turn away customers. Before those changes were made, Sheppard says, "We had a lot of national players quit playing in South Carolina."

2011 average annual auto insurance premiums

 
State averageAnnual premiumState averageAnnual premium
Michigan$2,541Colorado$1,508
Louisiana$2,453Texas$1,492
Oklahoma$2,197Delaware$1,489
Montana$2,190Florida$1,476
Washington D.C.$2,146Nebraska$1,470
California$1,991Pennsylvania$1,468
Mississippi$1,896Kansas$1,461
New Mexico$1,837Alaska$1,454
Arkansas$1,836New Hampshire$1,334
Maryland$1,807Massachusetts$1,328
North Dakota$1,794Idaho$1,325
Connecticut$1,786Alabama$1,306
Rhode Island$1,747Oregon$1,306
Wyoming$1,714Nevada$1,300
Hawaii$1,707Illinois$1,290
South Dakota$1,707Arizona$1,280
Georgia$1,670Utah$1,272
New Jersey$1,663Virginia$1,237
West Virginia$1,633Iowa$1,179
Kentucky$1,629North Carolina$1,154
New York$1,627Ohio$1,152
Minnesota$1,614Tennessee$1,146
Washington$1,584Wisconsin$1,128
Missouri$1,563Maine$1,126
National average$1,561South Carolina$1,095
Indiana$1,518Vermont$995
Source: Insure.com


About the rankings

Insure.com's state rankings show the relative cost of auto insurance among states. Insure.com commissioned a survey from Quadrant Information Services. Average insurance rates were calculated for more than 2,000 vehicles for model year 2011. Rates are based on a 40-year-old single male driver who commutes 12 miles to work. The sample policy had limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. The policy included uninsured motorist coverage.

This article was reported by Barbara Marquand for Insure.com.