Louisiana’s largest auto insurer will cut its rates starting in April by an average of 3.2 percent for its roughly 1 million Louisiana policyholders.
Insurance Commissioner Jim Donelon announced the rate decrease for State Farm on Thursday. It’s the company’s third rate decrease in the past nine months, totaling a drop of 7.7 percent.
The change, which will vary by policy, will go into effect April 1, and be applied to policies as they are renewed, The Advocate reported .
“These decreases are directly attributable to competition in the auto insurance marketplace and again demonstrates that competition is truly the best protection for policyholders,” Donelon said in a statement. “These reductions are welcome news for one-third of our state’s auto policyholders who are insured by State Farm and this action will pressure other insurers to take similar steps.”
State Farm’s latest move will have a $48 million total impact, according to a rate request filed with the insurance department. Last year, the company cut rates by 2.7 percent in July and again by 1.8 percent in September.
The decreases come after State Farm raised rates by an average of 13.5 percent in 2017, and by 8 percent the year before.
Louisiana’s high auto rates caused the Legislature to set up a task force to address the issue and make recommendations on how to lower consumer premiums. Donelon appointed the members of the task force, which include legislators, insurance company representatives, the trucking industry and trial lawyers.
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