Abe Scarr
State Director, Illinois PIRG; Energy and Utilities Program Director, PIRG
Statement: $182 million State Farm car insurance rate hike demonstrates need for legislative action
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New bill would protect Illinois consumers
CHICAGO — Bloomington-based State Farm finalized a $182 million Illinois car insurance rate hike on Friday, adding $58 to the average customers’ annual bill. The rate hike will impact more than 3 million Illinois drivers. Combined with $388 million in State Farm rate hikes in 2022, car insurance rates for Illinois State Farm customers have gone up by more than half a billion dollars in less than one year.
The rate hike follows a $63 million rate hike by Northbrook-based Allstate in January. Combined with $229 million in Allstate rate hikes in 2022, car insurance rates for Illinois Allstate customers have gone up by $292 million since the start of 2022. Earlier analysis by Illinois PIRG Education Fund and Consumer Federation of America found that combined, top car insurance companies raised Illinois drivers’ rates by more than $1.1 billion in 2022.
State Rep. Will Guzzardi, with the support of State Sen. Javier Cervantes and the Illinois Coalition for Fair Car Insurance Rates, recently introduced legislation to address unfair and excessive car insurance rates in February. 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. The legislation, HB2203, would empower 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 response to State Farm’s $182 million rate hike, legislators and advocates said:
“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 state Sen Javier 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.”
“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.”
