Tag: personal auto

Car insurance prices soar in Illinois, Rep. Will Guzzardi aiming to crack down on insurers

Mary Pat Campbell

Link: https://www.wbez.org/stories/car-insurance-prices-soar-in-illinois/b46209a7-5606-4bf4-8f15-806689c76e28?utm_source=Wirepoints%20Newsletter&utm_campaign=387e2a5fbc-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_895ee9abf9-387e2a5fbc-30506353

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The five biggest auto insurers in Illinois have raised automobile insurance rates a whopping $527 million since January, an analysis by two consumer groups shows.

That follows about $1.1 billion in rate increases last year by the top 10 Illinois car insurers.

The analysis by the nonprofit Illinois Public Interest Research Group and Consumer Federation of America looked at auto insurance rate increases by the five largest companies in Illinois: State Farm, Allstate, Progressive, Geico and Country Financial, which together make up 62% of the Illinois market.

…..

Now, state Rep. Will Guzzardi, D-Chicago, has introduced legislation to address those issues and crack down on insurers. Guzzardi’s bill would:

  • Require automobile insurers to get prior state approval for rate hikes.
  • Ban “excessive” insurance increases.
  • Prohibit using gender, marital status, age, occupation, schooling, home ownership, wealth, credit scores or a customer’s past insurance company relationships in setting car insurance rates.

It’s already illegal to use race, ethnicity and religion in setting rates. That would continue under Guzzardi’s proposal.

Author(s): Stephanie Zimmermann | Chicago Sun-Times

Publication Date: 6 May 2023

Publication Site: WBEZ in Chicago

Consumer Watchdog Calls on Insurance Commissioner Lara to Reject Allstate’s Job-Based Insurance Rate Discrimination, Adopt Regulations to Stop the Practice Industrywide

Mary Pat Campbell

Link: https://www.prnewswire.com/news-releases/consumer-watchdog-calls-on-insurance-commissioner-lara-to-reject-allstates-job-based-insurance-rate-discrimination-adopt-regulations-to-stop-the-practice-industrywide-301631577.html

Additional: https://consumerwatchdog.org/sites/default/files/2022-09/2022-09-22%20Ltr%20to%20Commissioner%20re%20Allstate%20Auto%20Rate%20Application%20w%20Exhibits.pdf

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Insurance Commissioner Ricardo Lara should reject Allstate’s proposed $165 million auto insurance rate hike and its two-tiered job- and education-based discriminatory rating system, wrote Consumer Watchdog in a letter sent to the Commissioner today. The group called on the Commissioner to adopt regulations to require all insurance companies industrywide to rate Californians fairly, regardless of their job or education levels, as he promised to do nearly three years ago. Additionally, the group urged the Commissioner to notice a public hearing to determine the additional amounts Allstate owes its customers for premium overcharges during the COVID-19 pandemic, when most Californians were driving less.

Overall, the rate hike will impact over 900,000 Allstate policyholders, who face an average $167 annual premium increase.

Under Allstate’s proposed job-based rating plan, low-income workers such as custodians, construction workers, and grocery clerks will pay higher premiums than drivers in the company’s preferred “professional” occupations, including engineers with a college degree, who get an arbitrary 4% rate reduction.

Author(s): Consumer Watchdog

Publication Date: 22 Sept 2022

Publication Site: PRNewswire

Evaluating Unintentional Bias in Private Passenger Automobile Insurance

Mary Pat Campbell

Link: https://disb.dc.gov/page/evaluating-unintentional-bias-private-passenger-automobile-insurance

Public Hearing Notice: Evaluating Unintentional Bias in Private Passenger Automobile Insurance, June 29, 2022, 3 pm

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In 2020, Commissioner Karima Woods, Commissioner for the District of Columbia Department of Insurance, Securities and Banking (DISB) directed the creation of the Department’s first Diversity Equity and Inclusion Committee to engage in a wide-ranging review of financial equity and inclusion and to make recommendations to remove barriers to accessing financial services. Department staff developed draft initiatives, including an initiative related to insurers’ use of factors such as credit scores, education, occupation, home ownership and marital status in underwriting and ratemaking. Stakeholder feedback on this draft initiative resulted in the Department concluding that data was necessary to properly address this initiative. Department staff conducted research and contacted subject matter experts before determining that relevant data was not generally available.

The Department is undertaking this project to collect the relevant data. We determined this initiative will be deliberative and transparent to ensure the resultant data would address the issue of unintentional bias. We also decided to initially focus on private passenger automobile insurance as that is a line of insurance that affects many District consumers and has previously had questions raised about the use of non-driving factors. The collected data will build on previous work done by the Department through the 2018 and 2019 public hearings and examinations that looked at private passenger automobile insurance ratemaking methodologies.

For this project to look at the potential for unintentional bias in auto insurance, DISB will conduct a review of auto insurers’ rating and underwriting methodologies. As a first step, DISB will hold a public hearing on Wednesday, June 29, 2022 at 3 pm to gather stakeholder input on the review plan, which is outlined below. The Department has engaged the services of O’Neil Risk Consulting and Algorithmic Auditing (ORCAA) to assist the Department and provide subject matter expertise. Additionally, the Department will hold one or more meetings to follow up on any items raised during the public hearing.

Publication Date: accessed 18 Jun 2022

Publication Site: District of Columbia Department of Insurance, Securities & Banking

Event: Risk-Based Rating in Personal Lines Insurance

Mary Pat Campbell

Link: https://www.rstreet.org/2022/04/05/event-risk-based-rating-in-personal-lines-insurance/

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The insurance industry is unique in that the cost of its products—insurance policies—is unknown at the time of sale. Insurers calculate the price of their policies with “risk-based rating,” wherein risk factors known to be correlated with the probability of future loss are incorporated into premium calculations. One of these risk factors employed in the rating process for personal automobile and homeowner’s insurance is a credit-based insurance score.

Credit-based insurance scores draw on some elements of the insurance buyer’s credit history. Actuaries have found this score to be strongly correlated with the potential for an insurance claim. The use of credit-based insurance scores by insurers has generated controversy, as some consumer organizations claim incorporating such scores into rating models is inherently discriminatory. R Street’s webinar explores the facts and the history of this issue with two of the most knowledgeable experts on the topic.

Author(s): Jerry Theodorou, Roosevelt Mosley, Mory Katz

Publication Date: 5 April 2022

Publication Site: R Street Institute