Illinois insurance rates increased by more than $1.25 billion in 2023, following a more than $1 billion increase the year before, according to an analysis from the advocacy group Illinois PIRG Education Fund.

The analysis reviewed more than 300 rate filings by the 10 largest car insurers in the state, a press release said. The insurers represent 81% of the auto insurer market in Illinois.

“This is the second consecutive year of rate increases of more than a billion dollars,” the release said. “Since 2022, top car insurance companies have raised Illinois rates by almost $2.4 billion.”

State Farm and Allstate, including subsidiaries, raised rates the most by $364 million and $210 million in 2023. The companies increased rates by $753 million and $439 million since 2022, the release said.

Illinois is one of two states that does not allow regulators to reject or modify auto insurance rate increases, the release said.

“Illinois car insurance customers deserve the same basic consumer protections most Americans take for granted,” said Illinois PIRG Education Fund Director Abe Scarr. “2023 should be the last year insurance companies can raise our rates by anywhere near — let alone more than — a billion dollars without scrutiny from the public and regulators.”

The Motor Vehicle Insurance Fairness Act, HB 2203, was filed last February to give the state and its constituents more control over policy increases. It would ban insurance companies from using non-driving factors when setting rates. The bill stalled in March and has sat in the House’s Rule Committee since.

“Yet again, we’ve seen staggering insurance rate hikes on Illinois drivers,” Rep Will Guzzardi, bill sponsor, said in the PIRG release “And too often, these premium increases fall on the backs of the families who can least afford to pay more. We need rules to make sure the car insurance industry is accountable, transparent, and fair in setting its rates.”

Recently, in California, an advocacy group, Consumer Watchdog, was able to challenge auto and home insurance rate hikes during a review process the state holds under California Proposition 103.

The challenges ultimately lowered the rate increases by $884.8 million for California policyholders.

Throughout the nation, car insurance — which has increased 29% since 2018 — is expected to hike another 12.6% this year, according to a Value Penguin and Lending Tree study. It will be the most significant increase for car insurance since 2018, with 2023 seeing the second-largest increase at 11.2%.

Last month, Allstate received double-digit increases in California, New York, and New Jersey following CEO and President Tom Wilson’s comments about dropping insurance customers in those states if rates weren’t increased.

Progressive Classic Insurance Co. recently requested a 19.78% increase to rates in West Virginia, according to Insurance Journal. It said the state is already considering a 19.9% rate increase request from Farmers Direct Property and Casualty Insurance Co.

California Department of Insurance Deputy Commissioner Tony Cignarale was recently asked about the rising insurance rates while speaking at an open board meeting of the Society of Collision Repair Specialists (SCRS). The audience member noted repair shops are noticing an increase in consumer responsibility for out-of-pocket expenses due to short payments while the bill payers are simultaneously increasing their premiums.

“So insurance companies know it’s going to take time to get a rate increase through because they have to justify it with all kinds of real data,” Cignarale said.

During the time it takes to get the rate increase, you’ll see the company reducing claim costs, staff, and direct costs to shops, he said.

“That’s where you get more disputes that might occur with insurance companies and shops,” Cignarale said. “Once those rate increases go through, you might see a little bit of a breather on that.”

Yet, if an insurance company sees that a particular practice is working, they could keep doing it, even after the rate increase, he said.

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Photo courtesy of rarrarorro/iStock.

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