Louisiana's Property and Casualty Insurance Rates Decline: A 2025 Overview
In 2025, Louisiana's property and casualty insurance sector experienced a significant decline in overall rates, marking the first such decrease of the decade. According to the Insurance Information Institute (Triple-I), based on S&P Global Market Intelligence data, despite these reductions, challenges from the state's litigation environment could hinder the benefits of recent reforms.
Statewide, the average premium for property and casualty insurance fell by 0.4% in 2025. Notably, private passenger auto rates decreased by 5.8%, resulting in more than $340 million in savings for policyholders. This trend continued in 2026, with a 3.9% reduction in approved personal auto premiums as of May, following a 2.5% decrease in 2024. These declines are attributed to reduced accident frequency and the preliminary effects of tort reform legislation enacted in May 2025.
Insurance companies have adjusted to these legal changes. For example, Allstate received regulatory approval for a 7.5% decrease in auto rates in early 2026, after a 7.6% reduction at the end of 2025. Meanwhile, while homeowners insurance rates are still increasing, their growth rate has decelerated from 10.4% in 2023 to 4.6% in 2025. Additionally, since 2024, the state's market has welcomed 17 new homeowners insurance carriers.
Insurance Commissioner Tim Temple emphasized the high cost of insurance rates, stating, "My priority for 2026 is to continue improving the insurance market by protecting consumers and increasing affordability and long-term availability across the state." Despite advancements, Louisiana's litigation rates, particularly in personal auto claims, remain more than double the national average.
Third-party litigation funding (TPLF), along with fraudulent claims practices, persist as key factors keeping premiums elevated. TPLF involves external financiers backing lawsuits for a portion of settlements, leading to more large verdicts over $10 million. An EY analysis at the 2025 APCIA Annual Meeting projected TPLF could add $50 billion in U.S. insurance industry costs over five years, affecting annual loss ratios by 4% to 5.2%.
Efforts to regulate TPLF continue, with a bill reintroduced in 2026 aiming for tighter oversight, though it has yet to advance past committee. This mirrors Florida's earlier reforms, ultimately lowering litigation and rates. "The data show that legislative reform works," said Sean Kevelighan, CEO of Triple-I, highlighting the ongoing need for legislative action in Louisiana.
Additionally, the Louisiana Fortify Homes Program received $80 million in new funding for 2026, extending to inland parishes with rising flood risks. Offering grants up to $10,000 for roofing improvements meeting Insurance Institute for Business & Home Safety FORTIFIED standards, starting January 1, 2027, these upgrades will qualify for hurricane premium discounts of 16% to 49%. Triple-I commended the program as a model for rejuvenating distressed insurance markets.