Illinois Auto Insurance Rates On The Move


Auto insurance rates are on the rise for the state of Illinois as a number of companies have announced modest increases for the year ahead.

Allstate Corp., one of the bigger players, will be bumping rates up between 2.5 to 3.5 percent and will make final determinations based on the length of time that a customer has been with the company. In Illinois Department of Insurance filings, the company cites revisions to rate adjustment factors across a number of products for the small overall increase.

Likewise, Esurance Property and Casualty Company will be increasing rates with a net impact of 2.7 percent, with the introduction of CarMatch Rental Coverage along with proposed changes to selected rating factors as the need for an increase.

Similarly, GEICO Insurance Company has submitted a 3 percent increase due to “revised base rates” for business interruption, property damage, uninsured/underinsured motorist, collision, and comprehensive policies with increases to business interruption, property damage, and medical payments ILFs as the primary causes for the increase.


The Holdouts Aren’t Really Holdouts

In an article for Crain’s Chicago Business, journalist Steve Daniels writes that “Virtually every auto insurer of any size operating in Illinois is increasing the cost of insuring your vehicle as 2014 dawns.”

Technically, that’s not true as Progressive will actually be reducing rates by around one percent. However, there’s an asterisk by that one, Daniels points out, adding that the company is coming off a “dramatic” in-state hike of 11 percent in 2012.

Illinois-based State Farm will be refraining from rate changes for 2014, though they did increase rates between 3 and 4 percent at the end of September 2013. At that time, State Farm cited “revised base rates for BIPD liability, medical payments, comprehensive, and collision coverages” as well as revised rating factors for model year, inexperienced operator adjustment, and location.

State Farm also introduced new BIPD liability, Uninsured/Underinsured motor vehicle coverage limits, and revised base rates and model year factors for motorcycles and motor homes.


Small Vs. Large Companies

While the rate increases should affect almost every customer with auto insurance, there is a trend among the larger companies to stay within that 2.5 to 4.5 percent range. Smaller companies are more likely to seek a 6, 7, or in the case of American National General Insurance Company, even a 14 to 20.1 percent increase.

In the case of American National, the purpose is to “revise base rates and zip code relativities for our PPA program.”

“We are also expanding our mileage categories for our CHROME program,” added James Gillette, company VP and actuary.


In Summary

Most of the rate increases will occur prior to May 1 with many having already taken place in December and several due this month. If you start getting questions and concerns from customers, that’s why. However, you can alleviate these concerns by pointing out the transparency factors that exist in the insurance industry. Companies file their requests — RF-3s — with the Illinois Department of Insurance each month. These are available for free online.

If you’re not based in Illinois, the process and terminology may differ slightly, but is still navigable once you make it to a state’s DOI website. Just encourage concerned customers to look for terms like “Insurance Rate Changes” or “RF-1.” When in doubt, they can also contact the department itself for clarification.

Helping customers to understand why rates may increase (or decrease) and how those changes affect them can actually be a blessing rather than an annoyance, offering an added layer of caring and customer service to their overall experience.

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