State Farm gets green light to raise LA auto insurance rates. causing concerns

NEW ORLEANS (WVUE) - Rising insurance rates are not only hitting homeowners hard, Louisiana drivers might also feel they’re under attack. The state recently approved a 17% rate hike impacting more than a million Louisiana State Farm Insurance policyholders. People’s pocketbooks are getting hit in all different directions. “It’s not nice to be a Louisiana policyholder whether it’s auto or home,” said Dan Burghardt, Dan Burghardt Insurance. State Farm got the green light to raise Louisiana auto insurance rates by 17.3% after initially requesting more than 18%. “It all started with COVID, and then lack of supply and demand, and then all of the sudden prices for parts and labor jumped,” said Burghardt. Dan Burghardt owns an independent agency and said at the end of each year, insurance companies look at the loss ratio versus the premium income to decide if they need to request a rate increase through the Department of Insurance. “No one wants a list of liquidated insurance companies like we just went through,” said Burghardt. “It’s a process. It’s just not wave a wand because you asked for it. They have to go through a number game,” said Burghardt. Insurance Commissioner Jim Donelon approved State Farm’s rate increase citing inflation. “[It’s] driven primarily by the increased cost of repairs to automobiles, and so it’s falling heaviest on folks who have full coverage,” said Jim Donelon, Insurance Commissioner. Many other auto insurers in the state also had approved rate increases at far more than State Farm, even as high as 38%. “The overall cost to the driver for this full coverage rate increase is the increased cost of labor in recent years and the increased cost of equipment such as rear-view mirror,” said Donelon. Donelon admits he’s worried this could drive people into a situation where they feel liability only or becoming uninsured are the only options they can turn to. Current State Farm policyholders will notice the increase next time they renew. That 17.3% increase is an average so that some people might experience higher rates, others lower.