Illinois Launches Campaign to Address Discriminatory Auto Insurance Pricing

Illinois Secretary of State Alexi Giannoulias has initiated the "Driving Change" campaign to address the use of socioeconomic data—such as credit scores, zip codes, and age—in auto insurance rate setting, which can lead to unfair and discriminatory premium charges. The campaign encourages residents to report experiences with discriminatory insurance practices and aims to promote a ratemaking process that prioritizes driving records as the primary factor for setting rates. The initiative received backing from organizations including AARP Illinois and state legislators. Studies highlight that older drivers, despite being among the safest, often face higher premiums, and drivers in disadvantaged neighborhoods or with poor credit are charged disproportionately higher rates compared to others with riskier driving records but better credit profiles. This discrepancy contributes to insurance affordability challenges and potentially impacts road safety by limiting insurance access. Illinois currently lacks a prior rate review system, making it one of only two states without this regulatory protection. The campaign emerges amid a notable rise in auto insurance rates in Illinois, with an 18% increase in 2024 and projected further increases, driven by factors such as escalating car repair costs. Policy discussions are underway, with legislation (SB0268) proposed to establish a prior rate review process, enhance transparency, and empower the Department of Insurance to oversee rate-setting practices and limit unjustified premium hikes. The bill is expected to be a key topic in the upcoming legislative veto session.