State Farm reduces rates in Louisiana by 5.9%
Louisiana’s Insurance Commissioner Tim Temple approved a 5.9% average rate decrease for State Farm auto insurance policies last week, according to a press release.
The rate increase will impact more than 1 million personal auto insurance policyholders, the release says. It adds that State Farm is the largest personal auto insurer in the state, writing nearly 30% of the market.
The rate decrease will take effect Jan. 1.
State Farm indicated to the state that the change is driven primarily by a reduction in physical damage claim frequency.
“I’m glad to see positive movement on auto rates in Louisiana for the first time in years,” said Temple in the release. “Because fewer accidents are contributing to these lower losses for insurers, we should not necessarily expect to see this level of decrease in future years unless we continue to pursue legal reform that addresses the foundational reasons our rates are the highest in the country.”
State Farm was also approved for a 9.7% average increase to its 300,000 homeowners’ insurance policyholders.
Consumers may review all property and auto rate filings online with the Louisiana Department of Insurance’s rate filing search tool.
State Farm announced last month that millions of customers would see rate reductions on auto insurance. This includes a 6.2% decrease in California and a 3% decrease in Georgia.
It said the rate reductions in California and Georgia were based on fewer costly physical damage claims. However, it didn’t give details on why they were cheaper.
The insurance company has received national attention for a series of lawsuits across multiple states that claim it uses software to undervalue actual cash values.
Fender Bender and CRASH Network also recently reported on surveys that show shops have seen State Farm reducing labor rates.
In July, Fender Bender reported that 57% of 230 survey respondents said State Farm had reduced its labor rates offered to their shop without explanation.
CRASH Network’s latest quarterly “Collision Industry Business Perspectives” survey found that 1 in 4 of 300 shop respondents said one insurance company is currently paying a lower labor rate than it was back in January.
“State Farm was the most common insurer cited by survey respondents, and the labor rate decreases weren’t insignificant,” Yoswick said while sharing some of the survey findings with RDN earlier this month.
State Farm went from $60 per hour to $55 per hour, and we are not a DRP for them,” one shop wrote of the 8.3% drop.
Without naming the insurance company, an open mic session at a Collision Industry Conference meeting last month sparked discussion about the systemic lowering of labor rates by a large insurer.
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