Car rates

State Farm raises Illinois auto insurance rates for second time this year

The average policy premium will increase by nearly $60 a year with the two rate hikes, according to documents filed with the Illinois Department of Insurance. The latest increase comes into effect on June 13.

“State Farm auto rates in Illinois still remain below pre-COVID-19 levels with this latest rate adjustment,” spokeswoman Angie Harrier said in an email. “We continuously monitor and adjust to trends to ensure that we precisely match price to risk. Our approach is to make incremental adjustments based on driving behaviors to help minimize the impact on customers. »

State Farm has been slower to raise prices in response to claims inflation than its main rivals, Allstate, Progressive and Northbrook-based Geico. Unlike those three, State Farm is a mutual insurer, technically owned by its policyholders. As a result, it is not subject to the same profitability pressures that the other three face as publicly traded companies or (in the case of Geico) a unit of publicly traded parent companies.

But more frequent rate hikes to lower levels always add up to big increases. The two combined price increases at State Farm this year total 8%. Allstate raised its rates in Illinois in February by an average of 12%. Chevy Chase, Md.-based Geico is mandating a 6% increase starting the end of this month, which follows a separate 6% increase at the end of last year. Progressive, based in suburban Cleveland, raised Illinois rates by 8% to 10% in February.

Insurers say they are reacting to the same inflationary pressures normal consumers face.

“Automotive claims costs are rising in part due to an increase in the cost of labor, materials and supply chain issues,” Harrier said. “State Farm is not immune to some of these industry trends.”

Consumer advocates have criticized the industry for making what they describe as windfall profits during the stay-at-home period of the pandemic, then dramatically increasing rates as soon as driving levels approach normal. .

In response to 16 state senators and several consumer advocates, the Insurance Department has ordered auto insurers to provide data on their earnings in Illinois in 2020 and early 2021. Regulators intend to make this information public at the end of June.