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According to data from Bankrate.com, the average Illinois
homeowner’s monthly premium has gone up 42% since January 2023.
Consumer Watchdog Executive Director Carmen Balber said a
confluence of events have caused cost increases for insurance
companies.
“Those are tied to the obvious, which is inflation which
everyone experienced after the pandemic, but also that led to
costs in labor increasing, construction costs increasing,
materials costs increasing. All of those things can lead to
higher costs when a home is damaged in a rainstorm, for
example,” Balber said.
Balber said insurance companies reacted to losses in the stock
market.
“When the insurance industry loses money on Wall Street, they
restrict sales or they raise prices, because the money that they
used to make on investments they now want to make from
premiums,” Balber explained.
Balber also said there have been more weather-related losses.
“Insurance companies, not just in the coast states but in
Illinois as well, will experience those (losses) from bigger
storms, hail storms, etc.” Balber said.
Digital insurance platform Insurify reported that home insurance
rates in the United States increased 19.8% between 2021 and
2023.
Insurify Data Insights Manager Chase Gardner said Illinois
insurers experienced losses in 2023.
“Last year in Illinois, for home insurance, it was one of the
ten worst states for loss ratios. What that means is that
essentially companies in the state were paying more money out in
claims than they were bringing back in in premiums,” Gardner
said.
Some analysts have expressed concern that homeowners may reduce
coverage in an attempt to lower their premiums.
Auto insurance rates are also inflated. Insurify projects an
increase of 31% in auto insurance premiums in Illinois this
year, including a 10% rise before Dec. 31.
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