BLOOMINGTON, Ill. (WIFR) – Bloomington-based State Farm will finalize a $182 million Illinois car insurance rate hike this week.
More than 3 million Illinois drivers will see an increase in their annual bill after the hike is finalized Friday, tacking on an average of $58. Combined with $388 million in State Farm rate hikes in 2022, for Illinois State Farm customers, that means car insurance rates have gone up by more than half a billion dollars in less than one year.
This trend follows a $63 million rate hike by Northbrook-based Allstate in January after a $229 million hike in 2022.
Even though Illinois requires every car owner to buy insurance, it is one of only two states that doesn’t protect insurance customers from excessive or unfair rates.
An analysis by the Illinois PIRG Education Fund and Consumer Federation of America found that top car insurance companies raised Illinois drivers’ rates by more than $1.1 billion in 2022.
State Rep. Will Guzzardi (D-Chicago) and Sen. Javier Cervantes (D) along with the Illinois Coalition for Fair Car Insurance Rates, recently introduced legislation to address excessive car insurance rates in February 2023.
“Because insurance companies use non-driving factors to set rates, massive car insurance rate hikes have a disproportionate impact on communities like those I represent,” said Cervantes. “That’s why it’s more important than ever that my colleagues in the General Assembly act to ensure fair and reasonable car insurance rates.”
The legislation would allow the Illinois Department of Insurance to reject or modify excessive rate hikes, and end the use of non-driving factors, such as credit scores, to set rates.
“In just the first two months of 2023, two companies alone have raised car insurance rates by almost a quarter of a billion dollars,” said Illinois PIRG Director Abe Scarr. “It’s time to empower the Department of Insurance to reject or modify unfair or excessive car insurance rate hikes. The people of Illinois deserve better.”
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Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.