By Jaidyn Nix, Southern University recent graduate & Louisiana Progress College Fellow

For this legislative session, my main research focus was auto insurance rates. Specifically, I looked at how auto insurance rates disproportionately harm Black drivers and the Black community. While researching this topic, I found that Louisiana has the second-highest auto insurance rates in the nation and the second-highest poverty rate. This anomaly started to make me question why Louisiana drivers pay hundreds of dollars more for auto insurance than drivers in neighboring states such as Texas or Mississippi.

My time as a Louisiana Progress College Fellow has allowed me to research policy and politics that directly affect my community. I have many family members from Louisiana who have complained about their ridiculous auto premiums for as long as I can remember. Auto insurance is so expensive in Louisiana, and it’s one of the reasons I am apprehensive about establishing roots here. It also made me want to find out why rates are so expensive here. My work led me to find that Louisiana has policies that can harm insurers, harm drivers, and non-driver/insurer factors that lead to higher premiums.

 Let’s start with the policies that negatively impact insurers. Louisiana has a “direct action” statute. This statute allows car accident victims to sue an insurance company before suing the insured driver. This statute can potentially harm insurers, putting them at risk of more lawsuits and increased litigation costs for their companies, who then pass those costs on to their consumers with higher premiums. During this legislative session, this statute has been reformed, the new law states that someone has no right to direct action unless certain situations apply, like if the person who caused the harm is bankrupt or insolvent or you can’t serve them with legal papers. The new law also states that if you can sue the person who caused the harm it also affects the insurance companies involved and you can’t mention the insurance company in the lawsuit’s title or reveal insurance coverage to the jury, unless it’s necessary. This new law makes it harder to sue insurance companies directly and adds more rules for how insurance companies must handle coverage disputes.

 Then there are the policies that harm drivers. My previous research showed that Louisiana insurance providers also include non-driving factors when determining rates. Gender, age, and credit history play a big role in the disproportionate impact auto insurance rates have on marginalized communities. Mississippi has the highest poverty rate in the country and uses many of the same non-driving factors to determine auto rates, but drivers there are still paying less. Another issue that creates harmful effects is the high number of uninsured drivers in Louisiana–nearly 14% of Louisiana drivers are uninsured. When these uninsured drivers cause accidents, insured drivers’ policies have to cover the damage, driving up the costs for their consumers through uninsured motorist coverage. 

Finally, there are the factors that both drivers and insurers can’t control. Louisiana is known for its wild and severe weather, including hurricanes and floods, which also increase costs. Louisiana’s roads are notoriously bad–potholes are a dime a dozen and can lead to drivers having to file claims. 

Now, my home state of Texas also has its fair share of bad weather and untamed roads, but there is more competition within the insurance industry that helps to keep premiums down. Some potential solutions to the problems insured drivers face in Louisiana could include: 

• Limiting or eliminating the use of non-driving factors, like credit scorers, in determining insurance rates to ensure fairer pricing. 

• Implementing stricter enforcement of insurance requirements and providing more affordable options to help reduce the number of uninsured motorists. 

• Prioritizing funding for regular road maintenance and improvements to reduce the number of accidents caused by unsafe driving conditions. 

• Investing in infrastructure and policies that alleviate the impact of severe weather on vehicles. 

If these solutions are implemented, Louisiana drivers could see their premiums reduced to levels more comparable to those of our neighboring states, Texas and Mississippi.

My two years as a college fellow have shown me the importance of the legislature passing policies that would assist citizens in being protected from predatory premiums. Louisiana having the second-highest poverty rate is already alarming. Residents shouldn’t have to worry about how expensive their legally required insurance will be. The time is now for Louisiana government officials to follow the procedures set by their counterparts in both Texas and Mississippi.