We’re not going to sit here and gloat that this is the result of the tort reform package passed in the June special session. It could be, but it could also be a function of a shrinking consumer market as people clear out of Louisiana’s economic dead zone. Either way, though, rates are dropping in what looks like a cascade.
Insurance Commissioner Jim Donelon said Monday that two major auto insurers have been approved for rate decreases for private passenger policies.
Progressive Insurance Group is reducing rates by 2.3% on new business effective Aug. 21 and for renewal business effective Sept. 18. Louisiana Farm Bureau Group submitted a rate filing for a decrease of 7.5% on new and renewal business, both effective Oct. 1.
The announcement follows one from State Farm Insurance Company, which in July announced a rate decrease of 9.6%.
Combined, the three companies cover over 50% of the private passenger auto insurance market in Louisiana and total 1.5 million policies, Donelon’s office said.
“These rate decreases are further proof that increased competition in the state’s auto insurance market is continuing to bring about savings for our policyholders,” Donelon said in a statement. “When we see rate decreases from one of our top ten companies, it usually isn’t long for the rest to follow suit.”
Farm Bureau has been dumping rates pretty quickly of late. They slashed rates by 4.4 percent in an October filing last year. And Progressive has cut their Louisiana rates three other times by a combined 6.2 percent over the last couple of years. Still, when the three biggest players in the Louisiana auto insurance market are chopping rates 8 to 10 percent, it’s a nice direction to see things go in.
But these cuts don’t encompass commercial rates, and that’s where the real problem lies. Farmers, loggers, truckers, construction – talk to people in those industries and they’ll tell you insurance rates are through the sky and, along with everything else that’s wrong with Louisiana’s dysfunctional John Bel Edwards economy, they’re putting those folks out of business quickly.
When those start to come down we’ll know that the tort reform package is really working. Maybe then we’ll see some sort of change in the state’s economic direction.