The insurer covers more than a quarter of all drivers in the state, many of whom will soon pay more.
State Farm, the insurer that currently provides auto insurance coverage to about 29 percent of Louisiana drivers, is expected to raise its rates in the state.
According to Louisiana Insurance Commissioner Jim Donelon, there are several reasons that State Farm is seeking to bump up its rates by double-digit average amounts.
“This 17.3% rate increase is being driven primarily by inflation, in the cost of labor, for auto repairs, and spiraling increases in the cost of parts and equipment for damaged vehicles,” said Donelon.
The increase has already been approved by the state, as of last month. This means that there will be an average 17.3 percent increase to premiums. As an average, that means that some drivers will have a higher rate increase, while others will have a lower increase. That is determined by a range of different factors.
Drivers with the largest auto insurance rate increases will be paying 33 percent more on their bills.
Depending on the auto insurance coverage and a range of different factors, some drivers will be seeing a rate increase considerably higher – in fact, nearly double – than the hikes experienced by those closer to the average.
“The 45% of our drivers who drive with minimal limits, and another 12% who drive uninsured, will not see the brunt of this coverage because they don’t buy collision and comprehensive,” explained Donelon.
In 2020, when many insurers reduced their rates to reflect lower road use due to the pandemic, State Farm slashed its own rates by an average of nearly ten percent. The following year, it raised those rates again by an average of 4.3 percent. That said, the upcoming increase returns the rates to levels higher than they were before the pandemic reductions.
“I refer to State Farm as the Cadillac of insurers in America,” said Donelon. “They’re everywhere, they have a big reputation, big name recognition, and they have a reputation for good service. Therefore, they can charge more. If the cost is too high, it’s a good idea to compare with other companies.”
That said, Donelon did share one primary tip for saving on Louisiana auto insurance rates. “There are savings to be had by shopping,” he said.
