This Louisiana home insurer is cutting rates after steep increases. But it’s not all good news.
One of Louisiana’s biggest property insurers sent a promising signal this week, saying declining reinsurance costs are allowing the company to cut homeowners insurance premiums by an average of 7.5%.
The decision by SureChoice, the second-largest home insurer in the state, is one sign of improvement in a yearslong insurance crisis that has stretched Louisiana homeowners’ budgets.
But the news is not all positive.
The rate cut comes just eight months after SureChoice increased rates by 12.5% on its 73,000 home insurance policyholders. Both the increase and more recent decrease also applied to 17,000 dwelling policyholders.
And overall, the average policyholder in Louisiana is still being hit with rate hikes.
Through November, insurers have collectively raised homeowners’ rates by another 4.9% in Louisiana, the latest in a string of escalating rates year over year.
State Farm, the state’s largest home insurer, filed for a nearly 10% rate hike on its 300,000 home insurance policyholders in September. That rate hike was the result of the firm’s hurricane modeling, “which projects higher future losses in Louisiana,” the Louisiana Department of Insurance said in a statement Thursday.
The data shows that while rates are no longer rising by double digits, Louisiana remains stuck in a pattern of high homeowners insurance costs, driven by worsening natural disasters from climate change, inflation and supply chain shocks during the COVID pandemic.
Insurance Commissioner Tim Temple, a Republican former insurance executive who took office in 2024, has ushered in a series of changes that he says will create more competition and drive down costs. Those include backing new laws to make it easier for insurers to raise rates and drop policyholders.
“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,” Temple said in a statement Thursday. “The Louisiana Fortify Homes Program is foundational to this effort, as is supporting the Coastal Protection and Restoration Authority’s mitigation efforts and embracing stronger — and better-enforced — building codes.”
Louisiana has seen rate hikes moderate from highs in 2023 and 2024. For instance, the 4.9% rate increase this year would be the smallest increase since 2020, before the crisis began, when rates edged up 1.9%.
Still, many homeowners are struggling to pay premiums that have doubled or tripled, and haven’t come down significantly since.
It’s not clear to what extent new insurance companies are writing policies in south Louisiana. Temple said in a recent interview that several have gone through the regulatory process to do business here, but that his department doesn’t track how many policies they write.
But he said he’s confident the recent changes will improve rates among existing insurers.
“The reform efforts aren’t solely based on just bringing new companies in,” Temple said. “Where you’re going to have the biggest impact the quickest is with the existing market.”
Andreanecia Morris, head of the nonprofit HousingNOLA, said the continued rise in home insurance rates shows the state has not done enough to stem the crisis. She said the SureChoice rate cut will give some people some “breathing room,” but that too many people are still struggling to pay their premiums.
Morris has pushed for the state to mandate that insurers offer certain levels of discounts for homeowners with fortified roofs, and Temple recently said his office is exploring adding such a mandate.
“Everyone agrees on the solutions,” Morris said. “It’s fortified roofs. We’re not doing that fast enough. We’re not doing that to scale.”
The cost of home insurance in Louisiana depends in large part on reinsurance, a global, loosely regulated industry that acts as an insurance backstop for insurance companies.
In other words, Louisiana homeowners pay higher costs not only because of hurricanes here, but because of increasingly destructive wildfires in California, storms in Florida and tornadoes in the midwest.
Louisiana insurers rely more heavily on reinsurance than the average insurance company, making price hikes more acutely felt here. And reinsurance costs spiraled for years, from 2017 to 2024, according to the trade publication Artemis, which tracks reinsurance costs.
But this year, reinsurance costs declined by 6.7%. The drop was largely the result of huge price hikes, which attracted a flood of capital into the market and affected supply.
SureChoice’s rate decrease was “primarily driven by a reduction in reinsurance costs,” the Insurance Department said in a statement.
In the long term, many insurance experts believe costs will continue to rise as climate change brings increasingly destructive natural disasters. Louisiana is among several states encouraging the building of stronger roofs to better withstand hurricanes.
