Why Insurance Rates Are Rising in Louisiana (2025)

If your home, auto, or business insurance premiums have gone up this year, you're not alone. Across Louisiana—especially in Baton Rouge—policyholders are seeing rate increases that can feel frustrating or even overwhelming. But what’s driving these hikes? And more importantly, what can you do about it? Let’s break it down.

Why does Louisiana have the highest car insurance rates?

Louisiana drivers pay some of the highest car insurance premiums in the country, averaging $3,618 per year, but is not the highest. Louisiana falls just behind Florida ($3,945) and New York ($3,840), according to Bankrate’s latest annual report. For comparison, the national average is $2,543.

So, what’s driving up costs in Louisiana? A combination of factors are to blame—frequent lawsuits and limited competition among insurers. While Louisiana is only slightly above average in the number of car accidents, the number of people who file injury claims is 200% higher than the national average, according to the National Association of Insurance Commissioners (NAIC).

Even more striking, insurance claims in Louisiana are twice as likely to result in a lawsuit compared to the national average. Only Florida sees more legal action following car accidents.

With the rate of uninsured drivers staying relatively constant since 2009 at 12-13%, this isn’t seen as a large factor in the recent skyrocketing of auto insurance rates in Louisiana.

Why is homeowners insurance so expensive in Louisiana?

Three reasons homeowners insurance in Louisiana is so high is due to more destructive storms, insurance companies leaving the state and the rising costs of rebuilding.

1. More Severe Weather and Higher Risk Zones

Louisiana has always been vulnerable to hurricanes and flooding, but recent years have brought more frequent and more destructive storms. As a result, insurers are recalculating risk—and raising rates accordingly.

Even if your area hasn't flooded recently, new FEMA flood maps and state risk models might place you in a higher-risk category now.

2. Insurance Companies Are Pulling Back

Some national insurance carriers have either reduced their exposure in Louisiana or stopped writing new policies altogether. This reduces competition and puts pressure on local agencies to find alternative solutions—often at a higher cost. When private insurers leave the state, homeowners are forced into Louisiana Citizens, the insurer of last resort.

3. Rising Costs of Rebuilding and Materials

If a storm damages your property, the cost to repair or rebuild it is higher than it was just a few years ago. Between inflation, labor shortages, and supply chain issues, claims are more expensive—so premiums go up to offset those future risks.

How to Lower Your Insurance Premium in Louisiana

There are several smart steps you can take today:

Shop through an independent agency: At Lewis Mohr, we work with multiple carriers to compare policies and find the best fit for your budget and needs.
Raise your deductible: This can significantly lower your monthly premium, especially if you have the savings to cover smaller claims.
Make your home more storm-resistant: Upgrading your roof, windows, or installing storm shutters can help you qualify for discounts. Building or renovating to FORTIFIED standards can significantly improve your home’s resilience to severe weather. In Louisiana, homeowners may qualify for insurance discounts of 20% to 52% on the wind portion of their property insurance by installing a FORTIFIED Roof or building a FORTIFIED Home™.
Bundle policies: Combining home, auto, or business insurance with the same carrier often results in cost savings.
Review your coverage annually: Insurance isn’t “set it and forget it”—especially in a changing market.

Why Work With a Local Agency Like Lewis Mohr?

As a family-owned, Baton Rouge-based agency in business for over 50 years, we understand Louisiana’s insurance landscape better than anyone. We can help you: