Louisiana Insurance Commissioner Tim Temple
BATON ROUGE — Auto insurance rates in Louisiana have been trending downward in the first half of this year mainly due to what insurers say was a decline in accidents beginning in 2024, the state’s insurance commissioner said last week.
Commissioner Tim Temple reported that since the beginning of the year, auto insurance firms operating in the Louisiana market filed 20 requests for rate decreases, 14 of which were reductions of more than 1%. These reductions included one double-digit decrease of 13.6% by Hugo Car Insurance and reductions of 7.3% for Geico and 3.9% for State Farm, the state’s Department of Insurance said.
“As cost drivers in the market go down, losses go down with them, and businesses are incentivized to compete for customers through lower pricing,” Temple said in a prepared statement. “While it will take time for this year’s legal reforms to take effect and begin making a difference, it is a positive sign that insurers saw fewer accidents in 2024 and early 2025.”
Temple, state lawmakers and Gov. Jeff Landry all worked to pass a number of legal reforms to reduce excessive lawsuits and high bodily injury claims this year. The reforms included raising financial penalties for uninsured drivers and increasing transparency in medical billing.
Benjamin Albright, CEO of the Independent Insurance Agents & Brokers of Louisiana, said he could not speak to the specific causes of why rates are declining, but Albright expressed hope that the passage of legal reforms could help to lower Louisiana’s rates to those in Mississippi and Arkansas.
“The data clearly shows that the overall amount of losses was lower in 2024 than in 2023, and you’re seeing insurance companies pass those savings along to customers in the form of rate decreases,” he told the Louisiana Record in an email. “However, I’d say that it’s too soon to describe this as a trend. We’ll need to see if the coming years can sustain lower levels of loss and therefore encourage further rate decreases.”
One key reform passed this year was a modification of comparative fault rules, according to Albright. That measure prohibits a plaintiff from recovering certain damages if the plaintiff is 51% or more at fault for the injury. Even so, the state has more work to do in the area of legal reform, he said.
Insurance industry observers are reluctant to say whether the decline in auto insurance rates is part of a long-term trend. One theory suggests that a measure passed in 2024 that extends the period to file tort claims from one year to two may be causing people recently involved in accidents to delay their filing of claims until next year, leading to a temporary lull in lawsuits against insurers.
But a spokesman for the Department of Insurance said it is too early to make such pronouncements about such legislative reforms.
“No, it is too early to tell what effect the recent legislative changes are having on our legal system and insurance market,” Deputy Insurance Commissioner John Ford told the Record in an email.
In the private passenger auto insurance market, the average rate change for 2024 was an increase of 2.2%, compared to increases of 15.3% in 2023 and 10.8% in 2022, Temple reported. This year, through the month of July, the average rate change in the market was a drop of 2.3%.
The commercial auto market, however, continues to see regular increases in rates, according to the Department of Insurance. The average rate change for commercial vehicles in 2024 was an increase of 8.5%, and during the period of January through July of this year, the average change was a rise of 4.9%.
