For countless drivers in Louisiana, auto insurance rates have long been a burden. But relief is soon coming to policyholders of the Louisiana Farm Bureau, the insurance commissioner says.
Jim Donelon announced in a press release that Louisiana Farm Bureau has requested a 4.4% cut on its insurance policies. This is one of three decreases to have occurred in the last year, following State Farm and Progressive.
John Tobler, deputy commissioner of Public Affairs with the Louisiana Department of Insurance, explained the reason for the highly anticipated insurance rate decreases.
“Earlier this year, there was a group of rate reductions that were applied for by State Farm,” Tobler told Louisiana Record. "The total of those reductions were 7.7% and that was in response to State Farm’s policy count dropping by about 100,000 over the last few years."
The reason so many policies had been dropped was because residents had begun to start shopping for policies and seeking out more affordable options, Tobler said.
“As a result of that, State Farm has lowered their rates, as well as changed their named storm deductible from a 5% back to a 2% deductible so that they could potentially bundle policies with homeowners and either gain back or stem whatever issues they were having there,” Tobler said.
Progressive’s rate reduction and Farm Bureau’s are both a response to State Farm’s rate reduction, Tobler said.
While the decrease may not be directly related to reform or a change in legislation, it is a result of competition in the private passenger auto space.
“The aspect of the legislation that was out there would have some value, but these elements are presently relative to competition, and they impact about half of all the policy holding drivers in Louisiana,” Tobler said.
The rate reductions will become effective Aug. 1 for both new and renewed policies.