State Farm is raising rates for Illinois drivers it insures by 6.5% on average.
The rate hike, the latest in a series from the state’s largest auto insurer, will add about $58 to the annual premium for the average policyholder, according to a filing with the Illinois Department of Insurance.
Bloomington-based State Farm issues more than 3 million auto policies in the state, insuring about one in every three drivers.
The latest price hike, slated to take effect next month, comes just six months after an 8.4% average increase. That lifted the average annual premium by about $69.
Most auto insurers have been rapidly hiking rates to catch up to inflationary pressures that have made many of them unprofitable on an underwriting basis.
State Farm’s increases are more modest than those by Northbrook-based Allstate, the second-largest Illinois car insurer, and even Chevy Chase, Md.-based Geico, which advertises how cheap it is compared with major rivals.
“As we have previously shared, we are continuously monitoring and adjusting to trends,” State Farm spokeswoman Gina Morss-Fischer said in an email. “Inflationary pressures and supply chain issues, combined with higher claim costs are driving rate changes. We continue to adjust to these trends to make sure we are matching price to risk.”
State Farm also announced its 2022 financial results today, posting a net loss for the year of $6.7 billion, by far its most unprofitable year ever. That compared with a $1.3 billion net profit in 2021.
The company is a mutual insurer, technically owned by its policyholders, and has an enormous surplus. That enables State Farm to absorb billions in losses without worrying about its financial condition or about shareholder reaction.
While many other rival insurers, like Allstate and Geico, say they have pulled back on advertising as they adjust pricing, State Farm has continued to blanket the airwaves with ads featuring “surprisingly great rates.”
The number of State Farm's policies in Illinois has risen over the past year, while Allstate’s and Geico’s have dropped. Nationally, Geico saw its auto policies fall 9% in the year that ended Dec. 31, according to a filing over the weekend by parent Berkshire Hathaway, an unheard-of result from an insurer that has been the fastest growing in the industry over the past two decades.
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February 28, 2023 at 01:04AM
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State Farm Illinois auto insurance rates rising again - Crain's Chicago Business
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