llinois drivers could soon see major changes in how their car insurance rates are calculated.
Why It Matters
Around 8.5 million drivers are registered in Illinois, according to Secretary of State Alexi Giannoulias's office.
By law, all vehicle owners in the state are required to carry auto insurance. According to NerdWallet analysis, the average cost of full coverage car insurance in Illinois is $2,328 per year, or $194 per month. For comparison, the national average for full coverage stands at $2,285 per year.
What To Know
Giannoulias is leading an initiative aimed at making insurance pricing fairer for Illinois residents. The Driving Change campaign aims to prevent insurance companies from using socioeconomic factors, such as credit scores, ZIP codes, and age, to charge Illinoisans higher premiums.
"Safe drivers in Illinois are paying the price for a system that is rigged against them," Giannoulias said in July. "Currently, insurance companies use a number of factors to determine your premium, including several that have nothing to do with your driving record. Policies based on credit rating and ZIP code disproportionately impact people with lower incomes and people of color. In fact, an Illinois driver with good credit and a DUI will get a lower premium than a driver with poor credit and no DUI."
According to the campaign website, the cost of auto insurance in Illinois has risen sharply, with the average full-coverage premium increasing 18 percent between 2023 and 2024. It also cited disparities in how rates are determined: a driver with a clean driving record but poor credit pays $862 more annually than a driver with excellent credit who has a DUI conviction.
Similarly, safe drivers living in minority ZIP codes are charged at least 10 percent higher rates than those in non-minority areas. Despite having some of the lowest crash rates among any age group, 75-year-old drivers pay 25 percent more than 60-year-old drivers, the campaign said.
What People Are Saying
Illinois Insurance Association executive director Kevin Martin has backed the use of such metrics for determining insurance rates.
"It does nothing more than provide a more accurate assessment of risk, whether or not it's age of a driver, whether or not it's the use of the insurance score, but they are very valuable, actuarially justified risk factors that have been used to keep people from paying more for insurance than they need to," he said.
What Happens Next
Giannoulias has already hosted several town halls on the topic where Illinois residents can voice their opinions. More are scheduled throughout September and October.
Comments
Post a Comment