Some Illinois legislators are condeming a $182 million State Farm insurance hike within the state, calling the boost “excessive” and unfair to constituents.
In a press release issued after the Bloomington-based insurer finalized the bump, the Illinois Public Interest Research Group (PIRG) said the increase would add $58 to the average customer’s annual bill.
“Combined with $388 million in State Farm rate hikes in 2022, car insurance rates for Illinois State Farm customers have gone up by more than half a billion dollars in less than one year,” the release said. “The rate hike follows a $63 million rate hike by Northbrook-based Allstate in January. Combined with $229 million in Allstate rate hikes in 2022, car insurance rates for Illinois Allstate customers have gone up by $292 million since the start of 2022.”
State Farm did not respond to a Repairer Driven News request for comment by publication deadline. Allstate issued a brief statement, telling RDN: “While more frequent, severe weather and inflation-juiced repair prices are causing insurance claim costs to soar, customers continue to get competitive prices with Allstate and can save money by bundling home and auto.”
An earlier joint study by PIRG and the Consumer Federation of America found that the nation’s top car insurers raised drivers’ rates within the states by more than $1.1 billion last year.
The latest increase came as state senators and consumer groups advocate for the passing of an Illinois bill that would stop insurers from “excessive” auto insurance hikes and prevent insurers from discriminatory practices.
The Motor Vehicle Insurance Fairness Act, HB 2203, filed last month, aims to give the state and its constituents more control over policy increases and would ban insurance companies from using non-driving factors when setting rates.
The bill is backed by a coalition of 15 consumer, community, and civil rights organizations, including PIRG.
“In just the first two months of 2023, two companies alone have raised car insurance rates by almost a quarter of a billion dollars,” said Illinois PIRG Director Abe Scarr. “It’s time to empower the Department of Insurance to reject or modify unfair or excessive car insurance rate hikes. The people of Illinois deserve better.”
Illinois lawmakers have been working to cap insurance rates for years.
As it stands, it is one of just two states that do not have the authority to approve or deny auto insurance rate increases.
Sen. Javier Cervantes (D-Cook County), co-sponsor of HB 2203, was among those speaking out about State Farm’s latest insurance hikes.
“Because insurance companies use non-driving factors to set rates, massive car insurance rate hikes have a disproportionate impact on communities like those I represent,” Cervantes said. “That’s why it’s more important than ever that my colleagues in the General Assembly act to ensure fair and reasonable car insurance rates.”
Underwriting losses
Both GEICO and State Farm reported billions in 2022 underwriting losses but have differing business moves and outlooks for 2023.
In his annual shareholder letter, Berkshire Hathaway Chairman and CEO Warren Buffett said 2022 was a “good year” for Berkshire, and offered a bright outlook for this year. The dozens of businesses that the company owns generated $30.8 billion of profit despite rising inflation and supply chain disruptions. GEICO, a subsidiary of Berkshire, however, had nearly $1.2 billion in currency losses and, specifically in car insurance, experienced the sixth straight underwriting loss despite increasing premiums, Reuters reports.
When State Farm announced its 2022 financial results on Monday the company said its auto insurance lines had seen “record underwriting losses due to rapidly increasing claims severity and significant additions to prior accident year incurred claims.” The loss was $13.4 billion.
Source:https://www.repairerdrivennews.com/2023/03/06/state-farm-finalizes-182-million-insurance-hike-in-illinois/
Categories: Illinois, Business