State Farm, the state's largest automobile insurer, got approval to raise auto insurance rates as drivers returned to roadways in Louisiana.
The company increased auto insurance rates by an average 4.3% as of April 5 for new customers and existing customers as their auto policies are renewed.
State Farm previously cut rates by 9.6% in Louisiana, just several months earlier, and like many other companies issued credits on existing premiums during the coronavirus pandemic to adjust to fewer travelers.
Statewide, the increase amounts to $53.5 million for State Farm, spread across 1 million policy holders. State Farm is the largest auto insurance company in Louisiana when ranked by market share, with nearly one-third of all auto insurance policies in the state.
The rate increase was approved by the Louisiana Insurance Commissioner in mid-December, records show.
"We continue to monitor trends to ensure we’re accurately matching price to risk, and to minimize the impact to customers as much as possible. Our data indicates more people are driving and it's resulting in an increase in auto claims from the levels in the spring of 2020," said Angie Harrier, spokesperson for State Farm. "Even with these adjustments, rates remain below pre-COVID-19 levels."
State Farm previously credited customers an average dividend of 25% on premiums owed between March 20 and May 31, 2020. That's about $20 per month for each vehicle insured. Across the country, that totaled $2 billion in rebates to State Farm customers, who received them in the form of credits on future premiums.
In Louisiana, the company dropped rates by 2.3% in March 2020 after previous reductions of 6.5% in 2019 and 4.5% in 2018.
Those previous rate cuts had been attributed by the insurance commissioner to a decline in customers and effort to regain market share.
In July 2016, State Farm had 1.14 million customers in Louisiana when it raised rates by 8%, but its customer base started declining. In August 2017, State Farm had 1.1 million policy holders in Louisiana and raised rates by 13% that year.
Between July 2016 and January 2019, State Farm reported that it had 117,852 fewer customers in the state.
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April 25, 2021 at 04:00PM
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