Lawmakers warn auto insurance rates could go up after bill advances

[April 04, 2024]  By Catrina Petersen | The Center Square

(The Center Square) – House Bill 4611, which would require auto insurance rates be determined by driving factors and not socioeconomic factors, passed out of and Illinois House committee on Tuesday, under the stipulation the bill would be amended later this week.

Illinois Secretary of State Alexi Giannoulias supports the bill. He said the measure will require auto insurance companies to use the individual’s driving record to determine a fair rate, not factors like age or socio-economic status.

Chairman of the Illinois House Insurance Committee, state Rep. Thaddeus Jones, D-Calumet, has proposed amendments to the original bill. State Rep. Will Guzzardi, D-Chicago, who was a spectator at Tuesday's hearing, said he had a similar bill. Guzzardi is sponsor of House Bill 4767.

"We have been negotiating with the industry for years and I am very hopeful we will be able to find some common ground where we can agree some of these discriminatory factors just shouldn’t be in law, but if the industry doesn’t do that then I think we need to proceed and protect our consumers, no matter what,” said Guzzardi.

The Illinois Insurance Association said it is opposed to the original bill. The association said it doesn't look at factors like race. The industry does look at credit scores when determining rates.

"What’s happening right now is a pricing system where wealthy drivers in affluent communities are paying less because poor drivers in low-income communities are paying more, and that’s just not fair,” said Guzzardi.

State Rep. Jeff Keicher, R-Sycamore, said the original bill would create rate hikes for senior drivers and safe drivers, which he actually would financially benefit from because he’s in the insurance industry and higher premiums mean higher commissions.

State Rep. Rita Mayfield, D-Waukegan, said, as a minority, there is discrimination when it comes to determining auto insurance rates. In committee, Mayfield said she wanted the original bill to go to the floor.

Guzzardi said he’s glad the bill got through.

"You heard from person after person in that committee that their constituents are going to them [representatives] and saying, ‘Premiums are going up and it’s not because I am doing anything wrong, I am driving safely.’ Part of that is because the way premiums are balanced, those increases are falling disproportionately on the backs of lower-income people,” said Guzzardi.

The Illinois Insurance Association said there are many factors, like inflation, that drive up the costs of premiums. The association also said, comparatively, Illinois’ premiums are lower than the national average.

"What we need is to rebalance the system so everyone pays based on their driving and not based on what community they live in, their credit score and employment history. Those non-driving factors shouldn’t be involved in determining someone’s insurance premiums,” said Guzzardi.

According to MarketWatch, the average cost of a full-coverage car insurance policy in Illinois is about $128 per month, or $1,541 per year, which is 23% cheaper than the national average of $2,008. Minimum liability coverage in Illinois is around $37 monthly, which is about 29% cheaper than the national average.