A new study by a Dallas-based researcher suggests that Louisianians pay a greater percentage of their annual income for insurance than people in any other state.
As The Advertiser reports, Jeffrey Chu of consumer website nerdwallet.com says the average Louisianan pays $7,300 a year for homeowners, health, life and auto insurance on average, or about 18.1% of their median annual earnings of $40,423—the highest percentage in the country. New York follows, at 17.4%, while Florida, 17.1%; Rhode Island, 16.7%; and New Jersey, 15.8%; rounded out the top five.
Along with the nation’s overall highest insurance costs, Chu says, Louisiana’s average cost of $1,742 for homeowners insurance is the second highest in the U.S. And Chu’s research also shows Louisiana consumers pay dearly for their auto insurance: $2,264, on average. That’s third-highest in the nation behind Michigan at $3,096; and Rhode Island at $2,513.
Christine Berry, associate professor of risk management at the University of Louisiana at Monroe, says the threat of storms affects homeowners and auto insurance rates, especially in south Louisiana. Rates in the central and northern reaches of Louisiana are similar to those in the rest of the country, she says.
“The wind (hurricane) exposure definitely is the biggest driver for the higher rates for homeowners,” she said in an emailed response to Daily Advertiser questions. “People forget that not all cars are driven away when there is a severe storm. Flood is covered by comprehensive auto insurance so that is another big factor (related to storms). But auto insurance rates are also driven by a high population density in parts of South Louisiana and high claims payments (liability).”
On average, Americans pay about 12% of their annual income on insurance of all types—about $5,261. Average annual U.S. costs for homeowner’s insurance is $1,034; health, $2,823; life, $304; auto, $1,100.
