Illinois measure would create oversight of car insurers on rate hikes

[February 10, 2023]  By Kevin Bessler | The Center Square

(The Center Square) – Legislation is being introduced in the Illinois General Assembly that would require auto insurance companies to undergo the same rate hike oversight that utility companies are subjected to.  

Illinois state Rep. Will Guzzardi, D-Chicago, points to charts about car insurance rates
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Supporters of House Bill 2203 say Illinois car insurers raised rates by over $1.1 billion in 2022. According to the Auto Insurance report, average Illinois car insurance rates increased by 18% last year, and have continued upward in 2023. A new study by Bankrate shows a 16.7% increase this year in Illinois, up $258 to $1,806.

“Every state except for Illinois and Wyoming has some mechanism for rate increases to undergo some kind of public scrutiny, so in Illinois these rates can go up by whatever amount the insurance companies want without any measure of accountability or transparency,” said State Rep. Will Guzzardi, D-Chicago, the bill’s sponsor.

The measure would direct the Illinois Department of Insurance to reject or modify excessive rate hikes.

A coalition of 15 consumer, community and civil rights organizations are backing the legislation.

“Excessive auto insurance rates have been an age-old problem here in Illinois for years,” said William McNary, co-director of Citizens Action Illinois. “Other states have prior approval, we should have it too. It's time, it's past time.”

Kevin Martin, executive director of the Illinois Insurance Association, said if passed, the legislation will do the exact opposite of what it is designed to do.

“It just seems a little unusual to think that a consumer group would actually be trying to tout benefits for consumers when in reality what it will do is it will cost them a lot more money,” Martin said.

Martin notes that every state that requires prior approval has higher insurance rates and premiums than Illinois.

Guzzardi's measure would also ban discriminatory pricing using non-driving factors such as a person’s gender, occupation, zip code or credit score.

“Discrimination is wrong, profiteering is wrong, and this bill will put an end to those practices in insurance rate-setting in Illinois,” Guzzardi said.

Greg Bishop contributed to this report.

Kevin Bessler reports on statewide issues in Illinois for the Center Square. He has over 30 years of experience in radio news reporting throughout the Midwest.