New Analysis: Illinois car insurance rates hiked by more than $1.25 billion in 2023

Second consecutive year increases top $1 billion

CHICAGO – The 10 largest car insurance companies raised Illinois drivers’ rates by more than $1.25 billion in 2023, according to an analysis released Thursday by Illinois PIRG Education Fund. The consumer group reviewed more than 300 rate filings by 10 companies which represent 81% of the Illinois car insurance market. Factoring in smaller companies representing the remainder of the market would show an even larger 2023 increase for Illinois drivers. 

This is the second consecutive year of rate increases of more than a billion dollars. Since 2022, top car insurance companies have raised Illinois rates by almost $2.4 billion. Rates went up by more in 2023 than in 2022. 

Illinois-based State Farm and Allstate, including subsidiaries, raised rates by the largest amounts, $364 million and $210 million respectively. Since the start of 2022, State Farm has increased rates by $753 million and Allstate has by $439 million. The two insurers combined represent 40% of the Illinois car insurance market. 

Despite requiring that car owners purchase insurance, Illinois is one of only two states whose regulators are not empowered to reject or modify excessive rates. The other, Wyoming, is the least populous state in the nation. 

“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 aggressive 2022 and 2023 auto insurance rate hikes came after insurers overcharged customers during the first year of the COVID-19 pandemic. According to analysis of data released by the Illinois Department of Insurance in June 2022, the top four car insurance companies by Illinois market share — State Farm, Geico, Progressive and Allstate — made roughly $500 million more in 2020 than they would have needed to maintain 2019 profit levels. 

Responding to public pressure, the companies collectively returned about $220 million to customers in 2020. But those four companies still raked in a $280 million pandemic windfall. An earlier analysis by the Consumer Federation of America of the Illinois auto insurance market estimated insurers’ total 2020 post-refund Illinois windfall at $896 million, or $99 per policy holder, on average.

Last year, the Illinois Coalition for Fair Car Insurance Rates, working with Rep. Will Guzzardi and Sen. Javier Cervantes, introduced legislation that would empower the Illinois Department of Insurance to reject or modify excessive car insurance rate hikes.

“Yet again, we’ve seen staggering insurance rate hikes on Illinois drivers,” said Rep Guzzardi. “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.”

Last year, the Illinois General Assembly passed legislation empowering the Illinois Department of Insurance to reject or modify excessive rate hikes in the individual and small business health insurance market.

“The state’s Department of Insurance should have the power to approve or modify rate hikes and limit the use of non-driving-related factors in setting rates,” said Sen. Cervantes. “The proposed bill prohibits setting rates based on a person’s race, gender, employment, education level, religion, and other factors. As it stands today, these non-driving factors really impact underserved black and brown communities. It is our job as public officials to protect our consumers.” 

Illinoisans are also facing other steep increases. According to an analysis done by the Wall Street Journal in July 2023, Illinois homeowners insurance rates had risen by 20-30% since January 2022. That was among the sharpest increases in the country, along with only 5 other states. 

Illinois PIRG Education Fund reviewed more than 300 filings made by the top 10 insurance companies by 2022 Illinois market share, including their subsidiaries. The analysis calculated the total premium increases (net of premium decreases) that went into effect for either new customers or renewals during calendar year 2023. The increases totaled more than $1,259,000,000 and impacted more than 5 million Illinois car insurance policyholders.