The price of auto insurance for Illinois drivers rose by more than $1.25 billion last year — after a $1.1 billion increase in 2022, according to a consumer group’s analysis of rate filings.
The report looked only at the 10 largest auto insurers, which account for 81% of the Illinois auto insurance market, and suggested rates could have risen even more in the past year.
Bloomington-based State Farm and Northbrook-based Allstate Inc. raised rates the largest amount at $364 million and $210 million, respectively. The companies make up about 40% of the state’s auto insurance market.
“Our payments to help customers recover from accidents have increased significantly in recent years with more cars on the road, serious accidents increasing, and repair costs rising due to inflation,” Allstate said in a statement.
State Farm issued a similar statement, saying in part: “Automotive claims costs are exacerbated by inflation and supply chain disruptions. All of this has increased the cost of labor and materials, which translates into higher car repair costs. We continue to adapt to these trends to ensure we match price with risk.
The nonprofit Illinois PIRG Educational Fund examined more than 300 quote requests in Illinois for the 10 largest auto insurance companies and their affiliates. It found that premium increases for new and renewing customers through 2023 totaled $1.25 billion, affecting more than 5 million policyholders in Illinois.
“Illinois auto insurance customers deserve the same basic consumer protections that most Americans take for granted,” Abby Scarr, director of the Illinois PIRG Education Fund, said in a statement.
The consumer group is pushing for regulators to have a greater role in determining how much insurers can charge.
Unlike some states, where auto insurers must obtain pre-approval for rate increases, Illinois allows insurers to set any rate they choose, then notify the Illinois Department of Insurance.
State Rep. Will Guzzardi and State Sen. Javier Cervantes, both Chicago Democrats, introduced legislation last year that would give the department the authority to deny or modify “excessive” rate increases and prohibit the use of certain “non-driving-related” factors in setting insurance premiums. .
Robert Passmore, vice president of the Chicago-based Property Casualty Insurance Association of America, said that despite the decline in inflation, insurers are still dealing with rising costs of car repairs and paying medical bills after accidents.
Increasingly complex technology in newer cars is also driving up repair costs, he said.
“All of these things continue to rise,” Passmore said, adding that this is a problem across the country. “Nothing happens here that doesn’t happen anywhere else.”
Passmore said higher claims processing costs inevitably lead to higher insurance premiums.
U.S. auto insurers cumulatively paid $1.12 in claims and expenses for every $1 in premiums written in 2022, according to an Insurance Information Institute spokesperson, citing S&P Global figures.
The insurance industry is fighting attempts to impose more regulation in Illinois, whether through increased rate controls or proposals to remove factors such as gender, marital status, age, occupation, education, homeownership, wealth or credit scores from auto insurance rates.
It is already illegal to use race, ethnicity, or religion in insurance quotes.
The insurance industry argues that Illinois’ light regulations maintain competition and that consumers are free to shop.
Industry representatives say removing non-driving factors from pricing would lead to less accurate risk predictions and mean that some customers who now get lower prices will end up paying more.
Even with rising prices, there are ways to try to lower your car insurance bill, experts say.
- Use online quoting tools to compare prices.
- Don’t be too loyal. Some companies use data to predict whether or not you’re likely to remain a customer, even after a price increase.
- Never let your car insurance expire, and avoid non-standard insurance if you can.
- Consider bundling your auto insurance with your home, rental, or life insurance for discounts.
- Look for safe driver discounts or membership discounts offered to unions, fraternal organizations and other groups.
- Ask about additional discounts on your vehicle’s safety features or for a safe driving course.
- Consider using your insurance company’s telematics software, which tracks individual driving habits through a device or mobile app, providing lower rates for safer drivers. Consumers have been slow to adopt the technology — only about 17% of drivers participate in it, according to consumer analytics firm J.D. Power — but it’s the most personalized pricing system on the market, proponents say.
- If you’ve never filed a claim, consider a higher deductible on your collision insurance.