Illinois Lawmaker Pushes For Stricter Auto Insurance Regulations Amid Rate Hike Concerns

Illinois State Representative Will Guzzardi is leading efforts to introduce new regulations that would require auto insurance companies to obtain state approval before implementing rate hikes. Additionally, he aims to implement a ban on excessive rate increases and prevent insurers from using occupation, gender, homeowner status or credit score as factors in calculating premiums.

According to analyses conducted by the Consumer Federation of America and the Illinois Public Interest Research Group nonprofit, the five largest auto insurance companies in Illinois have raised rates by a total of $527M since January 2023. This follows the $1.1B in rate increases imposed by the state’s top 10 insurers throughout 2022.

These significant auto insurance price increases have come under scrutiny due to the historically unrestricted regulations in Illinois. Insurers have enjoyed the freedom to raise rates as they please, with only a requirement to inform state officials of their intentions. Moreover, insurers in Illinois have been allowed to utilize factors unrelated to driving history, such as occupation, gender, and homeowner or renter status, when determining rates.

The proposed legislation aims to protect consumers from unjustifiably high premiums and address concerns regarding discriminatory practices in premium calculations. As the legislative process unfolds, the proposed reforms will be closely examined to strike a balance between industry interests and consumer protection.