State Farm to raise Illinois auto insurance rates for second time this year in June – Chicago Tribune
As gasoline prices plateau at record highs, auto insurance rates continue to rise in Illinois.
State Farm recently filed a request for a 3% rate increase with the state Department of Insurance, which is to take effect June 13. Combined with a 4.7% increase that hit in March, State Farm customers will pay about $59 more per year to insure each vehicle. .
“Automobile claims costs are rising in part due to an increase in the cost of labor, materials and supply chain issues,” State Farm spokeswoman Angie said. Harrier, in an email. “State Farm is not immune to some of these industry trends.”
State Farm, Allstate and Progressive — Illinois’ three largest auto insurers — have all sought rate increases this year, following industry-wide rate cuts and rebates that have proliferated during the pandemic, where reduced driving has reduced costs. According to industry analysts, the main drivers behind the rise in car insurance premiums are rising prices for new and used cars, supply chain disruptions, labor shortages and rising medical costs.
In 2020, State Farm reduced auto insurance rates in the state by 13.7% as many drivers parked their cars early in the COVID-19 pandemic. In February 2021, State Farm reversed course, raising its rates by 4.2%. But even with two increases this year, State Farm auto insurance rates will be lower than they were in 2019, Harrier said.
“While miles driven, volume and claims severity have increased, State Farm Illinois auto rates still remain below pre-COVID-19 levels with this latest rate adjustment,” Harrier said. .
Northbrook-based Allstate, the state’s second-largest auto insurer, gained momentum in January when it requested a 12% rate increase, essentially reversing its rate cuts over the past two years. .
In the spring of 2020, Allstate provided around $1 billion in rebates to auto policyholders nationwide with its “Shelter-in-Place Payback” at the start of the pandemic. Allstate cut rates in Illinois by about 5% in January 2021, but raised them by 2.5% in September, according to state filings.
With the latest increase, which took effect Feb. 17, Allstate auto insurance rates are now above pre-pandemic levels.
Allstate signaled on Wednesday when reporting its first-quarter results that customers could see more increases this year.
“Allstate is taking comprehensive actions to improve profitability, including rate increases, expense reductions and operational actions,” the company said. “Given continued inflationary pressures, we plan to implement rate increases above our initial expectations for 2022 to restore automotive margins to target levels.”
Progressive, Ohio-based, Illinois’ third-largest auto insurer, filed rate increases in January ranging from 6.3% for its direct customers to 10.1% for those using an agent, according to documents filed by the State.