Allstate auto insurance rates jump 14% in Illinois

Allstate raised auto insurance prices by 14% in Illinois last month, dramatically outpacing the national average and the rate of inflation. State Farm wasn’t far behind, raising rates by more than 8 percent for Illinois drivers in August.

Allstate’s premium increase announced Thursday averaged about 3.2 percent across the U.S., according to the Northbrook-based insurer.

For the year, Allstate has raised auto insurance rates 26 percent for Illinois drivers, far above the national average of about 10 percent, spokeswoman Mallory Vazquez said in an email. With the consumer price index up 8.3% through August, inflation alone does not account for Allstate’s sharp rate hikes in Illinois and other states.

“We evaluate the frequency and severity of accidents at the state level,” Vazquez said. “Inflation aside, some of the factors driving up losses in Illinois are the same things that are affecting the rest of the country: mileage has returned to pre-pandemic levels, vehicle collisions are more severe, driving speeds , distracted driving. Illinois is one of the best states for vehicle theft.

Other states where Allstate raised rates higher than average in August included New Mexico, Texas, Massachusetts, New Hampshire, Oregon, Arizona, Pennsylvania and Florida, the company said.

State Farm, Allstate and Progressive — the three largest auto insurers in Illinois — all filed with the state Department of Insurance for rate increases this year, a dramatic shift from the rebates and rate cuts that spread during the pandemic lockdown in 2020

Bloomington-based State Farm, the state’s largest auto insurer, raised Illinois insurance rates by 8.4 percent last month, following a 3 percent increase in June. In March, State Farm implemented a 4.8 percent rate increase for Illinois drivers.

In 2020, State Farm cut auto insurance rates in the state by 13.7% as many drivers parked their cars at the start of the COVID-19 pandemic. In February 2021, State Farm reversed course, raising rates by 4.2 percent and taking a “measured approach” to rate increases, State Farm spokeswoman Gina Morse-Fischer said in an email.

“As more people are on the road, we’re seeing an increase in claims,” ​​Morse-Fischer said. “Car claims costs are compounded by record inflation and supply chain disruptions. All of this has increased labor and material costs, which means higher car repair costs.”

Likewise, Allstate issued about $1 billion in rebates to auto policyholders nationwide at the start of the pandemic and cut rates in Illinois by about 5% in January 2021. But Allstate began raising rates last September and went big in January , when it filed for a 12 percent increase, essentially undoing the rate cuts of the previous two years. With the August increase, Allstate’s insurance rates are significantly higher than pre-pandemic levels.

Nationally, Allstate has collected $2.5 billion in increased auto insurance premiums since the start of the year, the company said.

Car insurance rates may go up in the future. A June report by S&P Capital IQ said private auto insurers, “besieged by the impact of inflation on vehicle repair and replacement costs,” were headed for an underwriting loss last year as serious road accidents increased. increased. But “aggressive responses” by motor insurers to rising costs will keep premium growth at “high levels” in 2023, the report said.

Another factor contributing to higher insurance rates in the industry is the explosion in catalytic converter theft as the valuable pollution control device becomes an increasingly common target for resale on the black market.

Last year, State Farm paid $62.6 million for 32,265 catalytic converter theft claims, a 13-fold increase from 2019. The pace is accelerating this year, with $50 million paid out for 23,570 claims in the first six months , according to the company.

Illinois ranked third in the nation for State Farm catalytic converter claims in 2021, with $3.1 million paid for 1,985 thefts. In the first six months of 2022, State Farm has already paid out more in Illinois than it did all of last year, with $3.5 million for 1,912 catalytic converter theft claims.

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