Illinois Auto Insurance Study Reveals Credit, ZIP Code and Age Drive Premiums for Safe Drivers
Illinois Auto Insurance Study Shows Safe Drivers Pay More Due to Factors Beyond Their Control
A new study released by the Illinois Secretary of State's office shows that Illinois drivers with clean records are paying higher auto insurance premiums because of factors they cannot control, including credit scores, ZIP codes and age.
The study, conducted by New York-based auditing company O'Neil Risk Consulting and Algorithmic Auditing, analyzed how multiplicative factors in insurance rate-setting create pricing disparities across the state.
Drivers with poor credit can pay more than 2.7 times higher premiums than someone with excellent credit, according to the findings. The study also found that older adults face substantially higher rates despite maintaining safe driving records.
Drivers ages 80 to 84 pay up to 72% more for bodily injury coverage than drivers in their mid-50s. Meanwhile, drivers in certain ZIP codes can pay more than 2.5 times higher rates than those in other parts of the state, even when all other factors remain the same.
The study was based on nearly 2,000 responses from Illinois residents and was commissioned by Secretary of State Alexi Giannoulias to support his push for Senate Bill 1486, legislation that would strengthen oversight of insurance rates.
"This study puts hard data behind what Illinois drivers have been experiencing for years — pricing practices that penalize people for factors beyond their control," Giannoulias said in a statement.
The bill, which passed the state House in March, requires the Illinois Department of Insurance to review auto and home insurance rate hikes over 10% and order refunds for customers it determines were overcharged. The state could contest proposed hikes if they are excessive, inadequate or unfairly discriminatory.
Giannoulias noted that every other state except Illinois and Wyoming has similar laws to review rate hikes.
"I think the insurance companies are scaremongering," said Abe Scarr, director of the consumer advocate group Illinois PIRG. His group wants to outlaw the use of race and credit in setting insurance premiums, though the House-approved bill does not include such sweeping changes.
Scarr said it remains unclear how the state would use the unfairly discriminatory language to reject rate hikes that rely on credit ratings.
"I havent seen this used in other states for this purpose, so we will see how that is used here," Scarr said.
Giannoulias study found that someone living in ZIP code 60426 in south suburban Harvey would pay a bodily injury premium more than 2.5 times higher than someone living in ZIP code 62379 in Warsaw, all other factors being the same.
The study also highlighted how age factors into premiums. When considering age, the study found that a base rate bodily injury premium of $100 would jump to $118 for a 70-year-old and up to $172 for an 80-year-old.
Algia W., an older adult from Oak Lawn, said her familys premiums have gone up yearly despite them never filing a claim. Her insurance company told her that was due to the rising number of claims in her area.
"We are close to retiring soon, and there is no way we could afford this coverage on a fixed income!" W said. "Why are WE paying higher premiums because of where we live?"
A 2019 Sun-Times investigation found that being a woman, living on the wrong side of two adjacent ZIP codes, renting rather than owning a home, or working in an unskilled job could result in a higher price quote for car insurance.
Car insurance premiums in Illinois rose 18% in 2024, according to Giannoulias. However, insurers argue that the bill would destabilize the states insurance market and result in higher premiums.
After the bill passed the state House in March, a coalition of insurance companies issued a statement saying it represented the most sweeping and harmful insurance regulatory overhauls in state history.
The insurance companies noted that auto insurance rates in Illinois are 18% below the national average. Rates are also declining in Illinois due to fewer crashes and claims, contrary to rising rates nationally, according to the companies.
"It is unclear when the bill could receive a Senate vote in Springfield," the article noted.
Giannoulias office has been collecting community feedback over the last year through his office Driving Change campaign.