Insurance regulators in Louisiana are fielding a rate increase proposal from the state’s largest provider of home insurance, State Farm. The insurer is seeking approval to boost their premiums on homeowner’s policies by an average of 8.5%. According to the state’s Insurance Department, the rate increase will affect more than 300,000 policyholders and would net the insurer an additional $32.7 million in premiums annually. State Farm is pushing for approval and is planning on enacting the new rates on existing policies beginning October 1st.
In March, State Farm submitted a much heavier rate increase proposal to the Insurance Department. Jim Donelon, the Louisiana Insurance Commissioner, denied the proposal, saying that the proposed 14% increase was far too excessive. State Farm has since acknowledged the concerns of the commissioner, as well as those of policyholders, and has taken steps to ensure more modest proposals in the future.
If the most recent proposal is approved, it will be the third consecutive year that the insurer has obtained approval for an increase. Last year, State Farm was able to raise their rates by 9.9%, along with an 8.3% increase the year before that. In both instances, the single-digit increases were proposed after the insurer’s original proposals had been deemed unjustifiable.
State Farm will not provide how the rate increase will affect policies throughout the state or which would be most affected; such information is ensured confidentiality according to Louisiana state law.