If you have had your license for some time, getting in the driver's seat might seem like no big deal. You are probably used to the responsibilities that surround driving. You also likely understand that bringing your vehicle in for regular maintenance, making sure the gas tank is full and paying for insurance are all part of owning a vehicle.
However, in some cases, you might be surprised to see a substantial increase in your insurance rates. But have you thought about why that might be?
How insurance rates are calculated
Automobile insurance provides coverage in cases of an accident or theft. And many people seem to be of the belief that insurance rates vary depending on how well you drive. However, there is much more involved in determining your insurance rate than your driving record. While that might influence your rate, the auto insurance industry considers multiple factors, including:
- How old you are
- Where you live
- Your credit score
- The type of vehicle you have
- Your marital status
If your rates have increased, you might consider insurance trends nationwide.
Auto insurance rates across the United States
On average, Americans have seen a 23 percent increase in auto insurance premiums since 2011. These increases affect 184 million drivers.
Across the nation, premiums average $1,470 per year. However, coming in just $354 less than Michigan's average, Louisiana has the second highest premiums in the United States, costing drivers $2,339 annually. As far as cities rate, Detroit is the most expensive city for car insurance ($5,464). And New Orleans sits in second place ($3,686).
Why are premiums so high in Louisiana?
Many people might think that insurance rates increase due to poor driving conditions or bad drivers. However, to a certain extent, coverage rates are high in Louisiana because of the frequency of claims filed and the amount of money paid out by insurance companies.
Many Louisiana residents file bodily injury claims after involvement in an accident. And the elected judges who hear the cases often award damages, siding with consumers. As a result, insurance companies must increase premiums to recover their costs.
Focus on your safety efforts
Overall, insurance rates might be higher for those who have been involved in driving incidents. However, despite the cost of insurance across the state, continuing to be responsible when you get behind the wheel might be the best thing you can do to protect your driving privileges.