Auto insurance coverage charges are rising sharply in Illinois, as drivers hit the highway and restore prices skyrocket | State and Regional

Citing every part from labor shortages to provide chain points, a number of main auto insurance coverage corporations have carried out sharp price will increase that would add upward of $100 to annual premiums for Illinois drivers navigating the waning pandemic panorama.

“The auto business has been vastly impacted by inflation, whether or not you’re on the pump paying nearly 50% extra from a 12 months in the past or shopping for a used automotive,” mentioned Sarah Foster, a Bankrate.com analyst. “What’s actually fascinating about auto insurance coverage is that it’s a spot the place inflation is hiding that a whole lot of Individuals may not anticipate. And it actually all has to do with the pandemic.”

State Farm, Allstate and Progressive — the three largest auto insurers in Illinois — lately filed for price will increase with the state’s Division of Insurance coverage starting from 4.8% to 12%, a dramatic shift from the rebates and price cuts that proliferated through the pandemic lockdown in 2020.

Foster mentioned auto insurance coverage corporations are rebuilding their declare reserves and responding to elevated protection prices as drivers return to the roads in numbers approaching pre-pandemic ranges. The largest drivers of upper auto insurance coverage premiums are elevated costs for brand spanking new and used vehicles, provide chain disruptions, the labor scarcity and rising medical prices, she mentioned.

“Hospital care is up about 3% and car components are up about 11% from a 12 months in the past, and these insurance coverage corporations need to cowl these claims,” Foster mentioned. “It’s possible for many drivers that insurance coverage goes up in comparison with even pre-pandemic ranges, as a result of inflation is squeezing the insurance coverage corporations.”

Bloomington-based State Farm, the state’s largest auto insurer, filed for a 4.8% price enhance in January. The rise took impact Monday, and equates to a median annual enhance of $36 per coverage in Illinois, State Farm spokeswoman Angie Harrier mentioned.

In 2020, State Farm reduce auto insurance coverage charges within the state by 13.7% as many drivers parked their vehicles on the onset of the COVID-19 pandemic and stay-at-home orders. In February 2021, State Farm reversed course, elevating charges by 4.2%.

“We’re constantly monitoring and adjusting to tendencies to ensure we’re precisely matching value to danger,” Harrier mentioned in an electronic mail Monday. “Our method is to make incremental changes based mostly on driving behaviors to assist decrease the affect to prospects.”

State Farm’s auto insurance coverage charges in Illinois stay beneath pre-pandemic ranges, Harrier mentioned.

Northbrook-based Allstate, the state’s second largest auto insurer, went massive in January when it filed for a 12% price enhance, primarily unwinding its price cuts over the previous two years.

Within the spring of 2020, Allstate issued about $1 billion in rebates to auto policyholders nationwide with its “Shelter-in-Place Payback” on the onset of the pandemic. Allstate reduce charges in Illinois by about 5% in January 2021, however raised them by 2.5% in September, in response to state filings.

With the most recent enhance, which went into impact Feb. 17, Allstate’s auto insurance coverage charges are actually above the pre-pandemic stage.

“Elevated driving, accident severity, inflation and restore prices are inflicting auto insurance coverage charges to go up,” Allstate spokeswoman Mallory Vasquez mentioned in an electronic mail Tuesday.

Regardless that auto charges are rising, shoppers which might be driving much less because of distant work can reduce their prices by way of the corporate’s pay-per-mile insurance coverage plan, Vasquez mentioned.

With most of its 7,892 staff in Illinois working remotely through the pandemic, Allstate reached an settlement in November to promote its Northbrook headquarters for $232 million to an industrial developer that plans to show the company campus into a large logistics facility. In January, Allstate bought a 10-story constructing at 29 N. Wacker Drive in Chicago’s Loop for an undisclosed value.

Vasquez mentioned Allstate’s Chicago places of work at River Level and Merchandise Mart will reopen quickly, and that the insurer can be “exploring choices” for brand spanking new workplace house within the Northbrook space, to accommodate staff who need to work out of an workplace.

Ohio-based Progressive, the third-largest auto insurer in Illinois, filed in January for price will increase starting from 6.3% for its direct prospects as much as 10.1% for individuals who use an agent, in response to state filings. An organization spokesman didn’t reply to a request for remark Monday.

Past inflation, altering driving habits, which have turned the less-crowded roadways into one thing of a demolition derby, might also be affecting insurance coverage charges, Foster mentioned.

In Chicago, the variety of drivers commuting downtown day by day final 12 months was 21% beneath 2019, in response to an annual visitors report by INRIX. However the roads have turn into more and more harmful through the pandemic, with 1,363 visitors fatalities throughout the state final 12 months, up greater than a 3rd from 2019, in response to the Illinois Division of Transportation.

“Not solely had been these corporations refunding premiums, which was wiping out their declare reserves, however they’re additionally contending with the truth that fatalities are up,” Foster mentioned. “All of that is feeding into one another and probably going to affect how a lot drivers are spending on their insurance coverage this 12 months.”