Louisiana - More than 1 million Louisiana drivers insured by State Farm will see an average decrease in their auto insurance premiums in 2026, while over 300,000 State Farm homeowners policyholders will face higher costs, according to actions approved by Insurance Commissioner Tim Temple.

Temple has signed off on State Farm’s request for a 5.9% average rate decrease on its personal auto insurance policies in Louisiana. The change will take effect Jan. 1, 2026.

State Farm is the largest personal auto insurer in the state, writing about 30% of Louisiana’s auto insurance market and covering more than 1,066,000 personal auto policyholders.

However, Louisiana homeowners insured with State Farm will see the opposite trend. Temple also approved a 9.7% average rate increase on State Farm homeowners insurance policies. The company is the state’s largest homeowners insurer, writing about 20% of the market and covering more than 300,000 homeowners policyholders.

The homeowners rate change is already in effect for new business and will take effect Dec. 15, 2025, for renewal policies.

Auto Insurance: Fewer Crashes, Lower Claims, Lower Premiums

State Farm attributed the approved 5.9% average auto rate decrease mainly to a reduction in the frequency of physical damage claims. In simple terms, policyholders are filing fewer claims for damage to their vehicles, which could be tied to fewer crashes or less severe incidents on Louisiana roads.

The rate change is described as a statewide average, which means:

• Some customers may see a decrease close to the 5.9% average.
• Others could see smaller decreases, no change, or even increases, depending on their individual risk factors, such as driving record, vehicle type, location, and coverage selections.

Temple said the reduction is an encouraging sign for drivers but cautioned that it may not signal a long-term trend unless broader changes are made.

“I’m glad to see positive movement on auto rates in Louisiana for the first time in years,” Temple said. “Because fewer incidents are contributing to these lower losses for insurers, we should not necessarily expect to see this level of decrease in future years unless we continue to pursue legal reform that addresses the foundational reasons our rates are the highest in the country.”

Louisiana has long been known for having some of the highest auto insurance premiums in the United States. While the commissioner did not detail specific reforms in this announcement, he tied the sustainability of lower rates to changes in the legal and claims environment, which can strongly influence how much insurers pay out and what they charge customers.

Homeowners Insurance: Hurricane Risk Drives Nearly 10% Increase

On the property side, State Farm’s homeowners customers are facing steeper bills.

The company’s 9.7% average homeowners rate increase is driven primarily by:

• Hurricane modeling that projects higher future losses in Louisiana, and
• Increased non-catastrophe loss experience, meaning higher claims even from everyday events that are not tied to major disasters.

Hurricane models are tools insurers use to estimate potential damage and losses from future storms based on factors like storm frequency, intensity, coastal exposure, and property values. If those models show rising risk, insurers often raise rates to ensure they can pay claims when major storms hit.

Again, the 9.7% figure is a statewide average, not a flat increase for everyone. Individual premiums can vary based on the home’s location, construction type, age, coverage level, claims history, and other risk characteristics.

This rate change is already in effect for new State Farm homeowners policies in Louisiana and will apply to renewals starting Dec. 15, 2025.

Temple framed the homeowners rate hike within the broader challenges of insuring property in a hurricane-prone state.

“Addressing the affordability of homeowners insurance in Louisiana will require continued commitment to improving the insurance marketplace, as well as a serious focus on strengthening the resilience of our homes and communities,” he said.

Focus on Resilience and Long-Term Relief

State officials are emphasizing resilience as a key part of controlling homeowners insurance costs over time.

Temple pointed to several ongoing efforts:

• Louisiana Fortify Homes Program – A state initiative aimed at strengthening roofs and improving the wind resistance of homes. This kind of mitigation can reduce damage in storms and may help lower claims over time.
• Coastal Protection and Restoration Authority (CPRA) mitigation efforts – Projects designed to protect and restore Louisiana’s coast, which can help buffer communities from storm surge and flooding.
• Stronger and better-enforced building codes – Upgrading construction standards and ensuring they are followed can reduce structural damage in hurricanes and other severe weather.

Temple called the Louisiana Fortify Homes Program “foundational” to strengthening the state’s housing stock and linked it with coastal protection projects and building code enforcement as central to improving the long-term insurance outlook.

The commissioner’s comments underscore that while regulators can approve or deny rate filings, underlying risk—from hurricanes to legal and claims trends—ultimately shapes what insurers charge.

What Policyholders Should Know

For State Farm customers in Louisiana:

• Auto insurance:
• Average statewide rate decrease of 5.9%.
• Effective date: Jan. 1, 2026.
• Impact will vary by policy, based on individual risk factors.
• Homeowners insurance:
• Average statewide rate increase of 9.7%.
• Already in effect for new policies.
• Effective date for renewals: Dec. 15, 2025.
• Actual changes will depend on specific property and risk characteristics.

Policyholders may wish to review their coverage with an agent, compare options, and ask how their individual risk profile affects their premium in light of these approved changes.