Louisiana Insurance Market Stabilizing, Commissioner Says
Significant insurance reforms enacted in Louisiana during 2024 are beginning to show positive results, with the state’s insurance market displaying signs of stabilization. According to Insurance Commissioner Tim Temple, these reforms have attracted 10 new homeowner insurers to the state and led to a decrease in both the cost and frequency of rate filings.
Temple highlighted the progress, stating that approved homeowners insurance rate increases averaged 6.6% in 2024, a significant drop from 14% in 2023 and 16.2% in 2022. Commercial multiperil lines also saw a slowdown, with rate increases averaging 3% in 2024 compared to 6.7% the previous year. Fire and allied line rate increases similarly decreased, averaging 1.8% in 2024 from 5.8% in 2023.
Furthermore, 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 approved rate decrease requests in 2025 has already surpassed the total approved in each of the past three years. Supporting this trend, rate filings for home insurers declined to 50 in 2024 from 80 in 2023, with similar declines recorded in commercial multiperil and fire and allied lines, according to the department.
Insurance Reforms Driving Change
The insurance reforms, championed by Temple and signed into law by Governor Jeff Landry, include several key measures. One pivotal reform is the repeal of the “three-year rule” (House Bill 611), which had previously made it challenging for insurers to non-renew policies after three years. Senate Bill 295 replaced the prior approval rating method with a file-and-use system, allowing insurers to adjust rates more swiftly while still maintaining regulatory oversight. Senate Bill 323 reformed bad faith statutes, establishing stricter processes for insurers to initiate loss adjustments and setting specific timelines for both non-catastrophic and catastrophic events, to expedite claims handling and improve insurer accountability.
Long-Term Recovery Anticipated
Temple emphasized that the recovery would take time, pointing out that the property insurance crisis in Louisiana developed gradually. “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’s focus for the current legislative session includes addressing Louisiana’s high auto insurance rates, which he described as the least affordable in the country, through auto insurance and legal reforms. He also plans to introduce legislation aimed at strengthening the Louisiana Fortify Homes Program, clarifying proof-of-loss requirements, and reducing litigation.
To further bolster the market, Temple stated 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. Friedlander noted that the average annual expenditure for personal auto insurance in Louisiana that year was $1,588, nearly 40% above the national average. He attributed Louisiana’s high costs to factors 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.
