Triple-I: Louisiana Insurance Reforms Begin to Deliver Rate Relief, but Challenges Remain Due to Impacts of Legal System Abuse, Fraud

Business Wire

MALVERN, Pa.--(BUSINESS WIRE)--
Louisiana's property/casualty (P/C) insurance market posted its first broad rate relief this decade in 2025, but headwinds caused by legal system abuse persist, according to a new members-only Issues Brief published today by the Insurance Information Institute (Triple-I).

P/C premium rates fell statewide across all lines combined by an average of 0.4% last year, reversing a pattern of consistent increases from 2021 through 2024. The most dramatic improvement came in private passenger auto, where premiums dropped an average of 5.8%, generating a statewide reduction of more than $340 million.

Triple-I’s analysis of S&P Global Market Intelligence data showed approved personal auto insurance premiums in effect in the Pelican State have fallen 3.9% year-to-date as of May 2026, building on a 2.5% average decrease last year. The gains reflect declining accident frequency and early benefits from legislative reforms targeting legal system abuse.

Homeowners Insurance Rate Growth Slowing

Homeowners insurance rates continued to rise, but at a substantially slower pace. Premium rate growth slowed to 4.6% in 2025, from 10.4% in 2023. Nine rate decreases were filed by homeowners insurers in 2025, the highest number since 2020, while 17 new insurers have entered the state’s homeowners market since 2024, injecting fresh competition.

“I am not satisfied with where rates are today and expect the reforms we’ve made in recent years to reduce costs for all insurers,” said Louisiana Insurance Commissioner Tim Temple. “My priority for 2026 is to continue improving the insurance market by protecting consumers and increasing affordability and long-term availability across the state.”

Litigation, Fraud Headwinds

Despite the promising trajectory, significant headwinds persist. Louisiana’s personal auto claims litigation rate remains more than twice the U.S. average, and bodily injury claims run nearly double the national norm. Legal system abuse, including misuse of assignment of benefits, rampant claim fraud and third-party litigation funding (TPLF), continues to inflate costs for policyholders.

“The data show that legislative reform works,” said Sean Kevelighan, CEO of Triple-I. “But the work is far from finished in Louisiana. Legal system abuse remains deeply embedded in the state’s claims environment and sustained legislative action will be essential to making insurance reliably affordable for Louisiana families and businesses.”

TPLF, in which outside investors finance lawsuits in exchange for a share of settlements, has fueled a surge in nuclear verdicts of $10 million or more, which have more than quadrupled nationwide since 2020. Louisiana ranked among the top 10 states for such verdicts in 2024. Legislation to expand TPLF oversight in the Pelican State, reintroduced in 2026 after stalling in 2025, died again this June in committee.

Focus on Resiliency

On the resiliency front, the Louisiana Fortify Homes Program received $80 million in new funding for 2026 and expanded eligibility to inland parishes facing rising flood risk. The program offers homeowners up to $10,000 in grants to upgrade roofs to Insurance Institute for Business & Home Safety FORTIFIED™ standards, with completed retrofits qualifying for hurricane premium discounts ranging from 16% to 49%, effective Jan. 1, 2027.

“Resilient homes mean fewer claims, lower losses and ultimately lower premiums,” said Kevelighan. “Programs like Louisiana Fortify Homes demonstrate how strategic investment in mitigation can attract more insurers to a market and broaden coverage availability. It is a model other states should study closely.”

About the Insurance Information Institute (Triple-I)

Since 1960, the Insurance Information Institute (Triple-I®) has been the trusted voice of risk and insurance, delivering unique, data-driven insights to educate, elevate and connect consumers, industry professionals, policymakers, and the media. An affiliate of The Institutes, Triple-I represents a diverse membership accounting for nearly 50% of all U.S. property/casualty premiums written. Our members include mutual and stock companies, personal and commercial lines, primary insurers and reinsurers – serving regional, national and global markets.

About The Institutes

The Institutes® are a not-for-profit dedicated to helping people and organizations succeed in the essential disciplines of risk management and insurance. Through numerous affiliated business units and brands, we educate, elevate, and connect students, professionals, and organizations by equipping them with the knowledge, skills, and collaboration they need to tackle the most complex risk management and insurance challenges. Backed by more than 115 years as a trusted knowledge partner, we empower people and organizations to create a more resilient world.