Auto insurance prices soar in Illinois [Boss Insurance]

Auto Insurance Prices Soar In Illinois

Illinois’ five largest auto insurers have raised auto insurance rates by $527 million since January, according to an analysis of two consumer groups.

This follows rate increases of about $1.1 billion last year by Illinois’ top 10 auto insurers.

Analysis by the nonprofit Illinois Public Interest Research Group and the Consumer Federation of America examined auto insurance rate increases for the five largest companies in Illinois: State Farm, Allstate, Progressive, Geico and Country Financial, which together account for 62% of Illinois. market.

The price increases come as Illinois’ historically hands-off insurance rules come under renewed scrutiny.

In addition to being able to raise rates at will, simply having to notify state officials of their plans, Illinois insurers can consider non-driving factors to set these rates, such as gender, occupation and whether a person rents or owns a home.

Now, State Rep. Will Guzzardi, D-Chicago, has introduced legislation to address those issues and crack down on insurers. Guzzardi’s bill:

  • Require auto insurers to obtain prior state approval for rate hikes.
  • Prohibit “excessive” insurance increases.
  • Prohibit the use of a customer’s gender, marital status, age, occupation, education, property, wealth, credit ratings, or prior relationship with a insurance to set auto insurance rates.

It is already illegal to use race, ethnicity and religion to set rates. This would continue under Guzzardi’s proposal.

But insurers would have to prove that their business practices – including marketing, underwriting, pricing and claims handling – do not result in unfair treatment of people because of their race, ethnicity, religion, their disability, gender or sexual orientation.

The 2019 Sun-Times survey used the companies’ own online quoting tools to get a sense of the impact of gender, home ownership, occupation, education level and zip codes on insurance prices.

Each comparison used the same make and model of vehicle and a fictional driver with an impeccable driving record. In more than 300 tests involving seven insurance companies, the Sun-Times found frequent price disparities. Female drivers were often offered higher prices than male drivers, even for the same type of car and with the same driving record. The same goes for tenants and people in less skilled or less educated jobs.

For people who landed in multiple unlucky categories, quotes were up to 33% higher, or $613 more per year.

“Rates should be based on overall risk and overall cost,” not factors that penalize people who may be good drivers but have the wrong attributes, says Illinois state executive Abe Scarr PIRG. “Part of it comes down to values.”

Illinois, home to State Farm and Allstate, is less regulated than some states, which require pre-approval for price increases or prohibit non-driving factors in setting rates.

The insurance industry is gearing up to fight Guzzardi’s proposal. Three industry groups — the American Property Casualty Insurance Association, the Illinois Insurance Association and the National Association of Mutual Insurance Companies — rejected the legislation. They say it would “harm consumers by reducing competition, increasing litigation, and likely increasing insurance rates for Illinois drivers.

“By using the variety of rating factors currently in use, insurers can more accurately assess driver risk and price their product based on the likelihood and severity of insurance claims,” ​​the groups say.

They describe the current system as “the fairest way to set insurance rates”.

The legislation would not prevent insurers from basing individual customer rates on data from an app that records their driving, such as Progressive’s “Snapshot” program or State Farm’s “Drive Safe & Save.” Such “telematics” programs allow companies to know exactly what type of driver they are insuring in order to decide on the pricing of their coverage.

Complaints abound on social media from drivers who say they tried to be role model drivers, failed and saw their rates go up.

Now, more rate increases could be on the way.

Allstate – which for a year and a half has been paying more on auto insurance claims than on premiums – blames inflation, citing higher prices for repairs and higher medical bills for those injured.

What happens with those costs is “really anybody’s guess,” Allstate executive Mario Rizzo told investors during a quarterly earnings call Thursday.

“But I think our view is – and we’ve been pretty consistent on this – we’re going to keep pushing prices up,” Rizzo said.