(The Center Square) — Inflationary pressures on the auto insurance industry has been hitting the wallets of Louisiana residents hard.
According to testimony from insurance policymakers at a House Committee on Insurance hearing on Friday, the increased rates follow a trend of increased severity of claims. They say as costs for an insurance company increase, premiums for policyholders also rise.
“In terms of claims costs, we saw a huge surge of inflationary pressure, that is driving claims costs upwards,” said Robert Hartwig, director of the Risk and Uncertainty Management Center. “The costs are elevated and remain elevated, and that is what is driving a lot of the rate increases today.”
“There has been a modest decrease in the frequency of claims filed, and an enormous surge in severity.” Hartwig said “The costs of those claims has absolutely swamped the frequency of claims.”
A recent survey from FINN, a car subscription company, ranked Louisiana as the 11th highest state for insurance premiums, at $2,546.