Louisiana lawmakers last year loosened restrictions on insurers’ ability to drop homeowners, betting that fewer constraints would help stabilize a market where premiums have reached crisis levels.
Critics warned the move would trigger widespread nonrenewals. Insurers and Republican lawmakers said it was overdue cleanup.
Records from the Louisiana Department of Insurance show that nearly a year after repeal of the so-called three-year rule, only one insurer has formally moved to cancel policies that were previously protected. The rule had barred insurers from dropping homeowners who had maintained coverage for three consecutive years.
That insurer is Foremost Insurance, an affiliate of Farmers Insurance. Foremost canceled fewer than 5% of its policies covered under the former rule, a threshold that avoids the need for regulatory approval. Companies must notify the department, but approval is only required above that level.
Foremost holds roughly 2% of Louisiana’s homeowners insurance market. Over the past year, it has also raised rates on several thousand policies.
Spokesperson Luis Sahagun said the increases reflected property-specific risk, inflation, and other cost pressures. He described the limited nonrenewals as part of routine risk management.
Other major insurers haven’t followed suit, at least not yet. State Farm and SureChoice, the state’s two largest homeowners carriers, declined to comment. It remains possible that additional companies will act later, but early uptake has been minimal.
The lack of immediate response underscores how little has shifted in Louisiana’s insurance market more than four years after Hurricane Ida destabilized capacity and pricing. The legal change removed a barrier. It didn’t create new appetite overnight.
State Rep. Gabe Firment, the Pollock Republican who sponsored the repeal, said he wasn’t aware only one insurer had used the provision so far.
He still described the law as part of a broader reform package with long-term benefits. Even if insurers don’t cancel existing policyholders, he noted, new policies are no longer subject to the three-year protection.
Firment urged homeowners to shop around, arguing some can still find savings by comparing carriers and agents. Progress, he said, has been slower than hoped. Cost pressure elsewhere in the economy only amplifies the pain when insurance bills remain high.
The repeal followed a broader regulatory shift after Tim Temple took office in 2024. A former insurance executive, Temple pushed to roll back what he called overly restrictive rules.
His predecessor, Jim Donelon, had championed the three-year rule to protect consumers and used tax incentives to attract smaller insurers. Many of those carriers later failed after the intense 2020 and 2021 hurricane seasons.
The Republican-led legislature passed Firment’s bill in 2024 largely along party lines. Gov. Jeff Landry signed it into law, though he has since said the pro-industry reforms haven’t delivered the relief homeowners expected.
The repeal took effect in January 2025. Around the same time, lawmakers suspended a 10% surcharge on policies issued by Louisiana Citizens Property Insurance.
State leaders hoped lower Citizens premiums would limit spillover if private insurers shed customers.
John Ford, a spokesperson for the insurance department, said the three-year rule discouraged insurers and reinsurers from committing capital to Louisiana and noted the state was alone in enforcing such a restriction. He added that insurers tend to move cautiously and that the nonrenewal process itself is new.
According to Beinsure, the early data suggests repeal removed friction but didn’t change underlying economics. Risk concentration, reinsurance costs, and storm exposure still dominate insurer decisions. Without movement on those fronts, policy flexibility alone won’t reset the market.
