Property and Casualty Insurance: Where Does Louisiana Rank?

Published May 12, 2009

(Chicago, Illinois ) Consumers in Louisiana are paying higher premiums for homeowners insurance than necessary thanks to ill-advised regulation, according to a new report card jointly released by The Heartland Institute and Competitive Enterprise Institute.

Like consumers in Florida, Massachusetts, Maryland and Hawaii, Louisianans pay more for homeowners coverage that is inferior to states with positive insurance climates.

Homeowners in Vermont, Utah, Idaho and Arizona enjoy lower premiums for broader and more predictable coverage, and earned “A” grades on the Heartland/CEI report card.

“On balance,” writes Eli Lehrer, the report’s author, “states with less-regulated insurance markets provide more consumer choice, more predictable rates, and insurance premiums that better reflect actual risk than do states with heavily regulated markets.”

The Property & Casualty Insurance Report focuses on homeowners and automobile insurance, the two types of insurance Americans typically are required to purchase. State laws in 46 states mandate the purchase of auto insurance, and nearly all mortgage lenders require their clients to secure homeowners coverage.

There are at least 11 key variables for evaluating P&C insurance markets. Among the most important are the size of the state’s residual markets, level of political oversight, loss ratio stability, rate regulation, and territorial rating.

Vermont achieved the report card’s highest raw score, with a total of 28 points. “Although not typically known for its free-market policies,” noted Lehrer, “the state has become a hotbed of insurance innovation.” The remaining A-graded states earned raw scores between 27 (Utah) and 23 (Arizona). Louisiana received the worst raw score, with -37 points.

Property & Casualty Insurance Report is available online at

Editors: Report author Eli Lehrer, a senior fellow with the Competitive Enterprise Institute and Heartland Institute, is available for comment on this study. To communicate with him, contact Dan Miller, Publisher/Executive Vice President or Tammy Nash, Media Relations Specialist at The Heartland Institute at 312/377-4000 or by email at [email protected] and [email protected].

The Heartland Institute is a 25-year-old national nonprofit organization based in Chicago, Illinois. The Competitive Enterprise Institute, also founded in 1984, is headquartered in Washington, DC. Both are tax-exempt under Section 501(c)3 of the Internal Revenue Code. Nothing in this news release or the report it describes is intended to influence the passage of pending legislation.