Insurance Market in Louisiana Appears to Soften

Insurance reforms enacted by the Louisiana legislature in 2024 are contributing to market stabilization, with 10 new homeowners insurers entering the state and a decline in both costs and the frequency of rate filings, according to Insurance Commissioner Tim Temple.

Temple said that approved homeowners insurance rate increases in 2024 averaged 6.6%, compared with 14% in 2023 and 16.2% in 2022.

In commercial multiperil lines, average rate increases slowed to 3% in 2024 from 6.7% the previous year. Fire and allied line rate increases averaged 1.8% in 2024, down from 5.8% in 2023.

In the first two months of 2025, the Louisiana Department of Insurance approved seven rate decreases for residential insurers, with reductions ranging from 4% to 11%. The number of rate decrease requests approved so far in 2025 has already surpassed the total approved in each of the past three years.

Rate filings for home insurers declined to 50 in 2024 from 80 in 2023. Similar declines were recorded in commercial multiperil and fire and allied lines, according to the department.

Insurance reforms in Louisiana

​In 2024, the Louisiana legislature enacted a series of insurance reforms aimed at stabilizing the state's property and auto insurance markets. These measures were championed by Temple and signed into law by Gov. Jeff Landry.

One of these key reforms is the repeal of the three-year rule (House Bill 611). This legislation eliminated Louisiana's unique "three-year rule," which had previously made it difficult for insurers to non-renew policies after three years.

Senate Bill 295 also replaced the prior approval rating method with a file-and-use system, enabling insurers to adjust rates more swiftly while maintaining regulatory oversight.

A reform of bad faith statutes under Senate Bill 323 also established a tighter process for insurers to initiate loss adjustments, including specific timelines for non-catastrophic and catastrophic events, aiming to expedite claims handling and improve insurer accountability.

Louisiana’s insurance recovery would take time

Temple said the property insurance crisis in Louisiana developed over time, and recovery would also take time.

“Florida began its push for insurance reform in 2022 and started seeing similar results after about 18 months,” he said in a report from AM Best.

Temple said his focus for the current legislative session includes supporting auto insurance and legal reforms to address Louisiana’s private passenger and commercial auto rates, which he described as the least affordable in the country.

He also plans to introduce legislation aimed at strengthening the Louisiana Fortify Homes Program, clarifying proof-of-loss requirements in the claims process, and reducing unnecessary litigation.

Temple also said that auto insurance reforms should include direct action reform and increased transparency in litigation funding.

A report from the Insurance Research Council identified Louisiana as the least affordable state for personal auto and homeowners insurance in 2022, according to Mark Friedlander, senior director of corporate communications for the Insurance Information Institute.

He said the average annual expenditure for personal auto insurance in Louisiana that year was $1,588, nearly 40% above the national average.

Friedlander said Louisiana exceeds national averages across multiple personal auto insurance metrics, including accident frequency, repair costs, medical utilization, attorney involvement, and claims litigation.

Litigation over personal auto claims in Louisiana also occurs at more than twice the national average, second only to Florida.