This latest price move will add $315 annually to the average premium Illinois customers of Allstate are paying, according to a filing yesterday with the Illinois Department of Insurance. It takes effect Aug. 18, so existing customers will pay the higher prices whenever they renew their policies.
The two rate hikes combined will have Allstate auto customers here paying $520 more on average per year, or $43 monthly. Allstate is the second-largest auto insurer in Illinois, trailing only State Farm.
Northbrook-based Allstate isn’t the only major car insurer giving policyholders a rate shock. Geico, which for decades has advertised heavily how much customers can save by switching to it, recently notified drivers in Illinois of a 17% average rate hike.
Adding Geico’s two smaller recent price hikes, the Chevy Chase, Md.-based insurer is raising prices for most of its customers in Illinois by $470 annually on average.
Auto insurers to varying degrees are struggling to keep up with the pace of inflation in settling claims. Soaring used-car prices have significantly increased what it costs insurers to cover total losses.
Allstate warned investors earlier this month that second-quarter results will show substantial losses insuring cars. The company’s stock has fallen 20% since hitting a 52-week high April 20.
Still, Allstate’s rate hikes in Illinois have been steeper than elsewhere in the country. Through July 20, Allstate said, it had boosted auto rates by 8.3% on average nationwide. Illinois’ 12% increase in February well exceeded that. It remains to be seen whether drivers in other states will suffer increases near this 16% hike.
Allstate spokespeople didn’t respond to a request for comment.
Illinois has one of the most insurer-friendly regulatory regimes in the country. The state has virtually no authority over rates, and insurers merely have to file with the Department of