Last week State Farm announced plans to cut Louisiana auto insurance rates, marking the fourth time the state’s largest auto insurance company has lowered rates over the past two years, for a total decrease of 10.4%.

While the series of cuts come as welcomed news to Louisiana drivers, notoriously plagued by high auto premiums, insurance experts are quick to note this doesn’t change the fact that the state’s rates still rank among the highest in the nation.

Nor does it quell the business community’s push for tort reform to address what it sees as systemic issues leading to high auto rates and driving business out of the state.

The rate cuts, first of all, are only for the personal lines market, says Jeff Albright, CEO of Independent Insurance Agents and Brokers of Louisiana. In the state’s commercial market, auto rates have not only not gone down, they’ve risen. 

“The problem is much worse in the commercial lines market,” Albright says. “Rates continue to go up. We’re literally driving business out of the state because of the extremely high costs of commercial insurance.”

Businesses with large fleets of trucks and more risky insurance policies, he says, are struggling to even find carriers because so few insurance companies want to write those policies in Louisiana. 

In the personal market, State Farm is cutting its rates in an effort to recoup some 100,000 customers the company has lost to competitors in recent years, says Albright and Louisiana Insurance Commissioner Jim Donelon. It’s a benefit of having some competition in the market. Louisiana Farm Bureau and Progessive have also cut rates in Louisiana recently, though by smaller percentages.

Albright, however, argues personal market competition is still weak compared to other states, saying there are several carriers that don’t do business in Louisiana. 

Louisiana, which has the second-highest auto rates in the nation, might even move up to the top spot soon, Albright says, following successful legislative efforts in Michigan—which has held the No. 1 spot for years—to reform its auto insurance system and reduce rates. 

“There’s no question we have a systemic problem with auto insurance rates, driven by our highest in America claims-to-litigation ratio,” Donelon says.

While Louisiana’s auto claims are often on par with the rest of the nation, the number of lawsuits related to auto claims is far higher than in other states, Donelon says. 

The state’s powerful business lobbying group, the Louisiana Association of Business and Industry, rallied behind tort reform efforts in the Legislature earlier this year, sponsored by Rep. Kirk Talbot, R-River Ridge, which ultimately failed. LABI, however, plans to continue the fight in upcoming legislative sessions.