Car insurance rate hikes in Illinois are on the rise, consumer advocates want statewide oversight

CHICAGO (WLS) -- Car insurance rates are on the rise as consumers continue to battle inflation, but state policies may change to protect drivers from extreme rate hikes.

Illinois is one of only two states without oversight when it comes to auto insurance rates. The industry said the system works, but some state lawmakers and advocacy groups want that to change.

Jaqueszian Dukes' car insurance bill surged by $900 this year, even though nothing about her coverage had changed.

"Insurance is mandatory," she said. "You are trying to get to work and then you are dealing with these prices."

The I-Team contacted Dukes' provider, Founders Insurance, asking why her rate jumped. The company did not get back to us.

According to an auto insurance report by the consumer watchdog group Illinois PIRG and the Consumer Federation of America New analysis, Illinois car insurance rates hiked by more than $500 million halfway through 2023.

Dukes isn't the only one facing a rate hike. The analysis found that the average Illinois car insurance rate increased by 18% in 2022. Only one other state saw a bigger jump.

Abe Scarr with Illinois PIRG says that there are some legitimate reasons rates have increased; like the cost of replacing cars and their parts, but says, "What we're worried about is that here in Illinois, unlike just about any other state, we have no regulator who is looking at these rate filings to see if they may be excessive or unfair."

So PIRG and the Consumer Federation of America are backing proposed state legislation that would have the Illinois Department of Insurance oversee auto insurance rates and be able to reject or modify what they feel are excessive hikes. It would also end the practice of allowing non-driving factors, such as education level, gender and credit scores, to set rates.

"What we saw with the pandemic was, the risk of driving went down but premiums didn't go down in proportion. They did eventually give some rebates, but still almost a $900 million windfall went to the insurance companies," Scarr said.

The I-Team reached out to insurance expert Lynne McChrisian, Director of Risk Management and Insurance Research at the University of Illinois, to speak for the auto industry about government oversight.

"It won't change the cost of insurance and I think that's the piece that's missing. It might make insurance cost more because implementing that new system is going to come with costs. And it works right now with what we have," McChrisian said. "The fact that insurance in Illinois is affordable, and in the middle of the pack based on up there states is evidence that the system is working and the fact that we have more insurance companies here than a lot of other states can shows you that the competition that's available does work to the consumers benefit."

Dukes said oversight couldn't hurt. She recently shopped around and got auto insurance through her home insurance provider for a better deal.

"I bundled it so I'm saving money, best decision I ever made," she said.

If you're looking to lower your auto insurance rates, there are steps that you can take like asking for a higher deductible, reducing coverage on older cars, and paying your full bill instead of making installments.

Insurance Information Institute: Nine ways to lower your auto insurance costs