New bills aims to regulate auto insurance rate hikes

State Farm hail claims payouts alone were up more than a billion dollars in 2022.
Published: May. 3, 2023 at 6:11 PM CDT
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PEORIA (25News Now) - Having car insurance is a state law but lately that bill is hurting pockets.

Abe Scarr, the Director of the Illinois Public Interest Research Group (PIRG) says, “State Farm has raised rates by almost three-quarters of a billion dollars, $750 Million.”

A new report just released from the Consumer Federation of America along with Illinois PIRG shows in 2023, auto insurance rates with the top five insurance companies went up more than $500 million in Illinois, an average increase of $144 a person.

State Representative (D-39th) Will Guzzardi says “those increases are being born especially by low-income drivers and drivers of Color. The folks who can least afford to pay more for their car insurance.”

One lawmaker wants to give the state the final say on whether a company can and should increase it’s rates before the bill gets to the driver.

Rep. Guzzardi explains ”48 other states have a mechanism reviewing increases.”

Scarr says House Bill 2203 will aim to regulate increases so ”new car insurance rates hikes cannot go into effect until after regulators have reviewed them and modify or approve them.”

Nonprofits also want a change in what they call discriminatory factors.

Guzzardi says the factors typically consider if you ”are a homeowner, do you have a bachelor’s degree, what zip code do you live in? What’s your credit score? There’s no reason why those should be involved in setting your insurance rates.”

Claims are up.

State Farm hail claims payouts alone were up more than one billion dollars in 2022.

Their website also shows - last year - the company ended with a net worth of over $131 Billion.

Guzzardi says ”auto parts are more expensive these days, the supply chain issues and we understand that. We’re not saying these companies are not allowed to raise their rates or shouldn’t be allowed to raise their rates, they should just be able to justify it.”