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Chicago Tribune
2 days ago
- Automotive
- Chicago Tribune
State lawmakers, officials seek input into how auto insurance rates are set
Just weeks after Gov. JB Pritzker called for action following State Farm's 27.2% rate hike for homeowners insurance, some state lawmakers and officials said they are renewing efforts to address the steady rise in auto insurance rates. Curbing the cost of auto insurance has been the subject of several legislative proposals in the last couple of years, but those measures have yet to go anywhere. The Illinois secretary of state's office, which has unsuccessfully promoted a measure that would eliminate factors such as credit scores and advanced age from being used as metrics to set car insurance rates, is set to launch a campaign to highlight why it thinks employing those factors is unfair to consumers. 'This, to me, is an economic justice issue. People are struggling to pay their bills. People are required to have car insurance, and it's becoming unaffordable for folks to have it,' Giannoulias said. 'So if the purpose of auto insurance is to protect the eight and a half million Illinois motorists, it only makes sense that their driving records … serve as the primary factor for setting their rates.' Car insurance rates have climbed across the country. According to the finance website the rates have increased at a slower pace compared to past years but from 2023 to 2024, full coverage auto insurance jumped by an average of 14% and by 12% from 2024 to 2025. The website, citing an official from the Insurance Information Institute, attributed the rising rates to some of the worst underwriting losses in decades. also suggested President Donald Trump's administration's tariffs on vehicles and auto parts could affect car insurance costs. Democratic state Rep. Will Guzzardi of Chicago, who has worked on legislation aimed at regulating car insurance rates, said he is optimistic there's enough will in the legislature to take on high costs of auto insurance, but acknowledged the need to do so without harming the insurers doing business in Illinois. 'We want to maintain a vibrant, competitive insurance market in Illinois, where companies are competing for your business, and that drives prices down,' Guzzardi said. 'Premiums are rising and Illinois consumers are bearing the brunt of it, and government needs to step in and protect us from those kinds of abuses.' A bill Guzzardi introduced in January would bar insurers from refusing to issue or renew a policy of auto insurance based in whole or in part on 'specified prohibited underwriting or rating factors.' The bill would require auto insurers to show that their handling of claims and algorithm models do not unfairly impact any group of customers based on factors including race, gender, religion or sexual orientation. The bill has been stalled in the House, and Guzzardi acknowledged the difficulty in getting such legislation passed given the insurance lobby's power in Illinois, which is home to both State Farm and Allstate. 'If it's a reasonable increase and (insurers) can justify it, then it's fine. But if they're just raising their rates to protect their profits and pad their CEO pay, then the state has the ability to veto or reduce those premium increases,' Guzzardi said. 'And it (seems) really unfair to base someone's car insurance premium on factors that are out of your control and have nothing to do with whether or not they're a good driver.' In a statement, the Illinois Insurance Association, along with the American Property Casualty Insurance Association and the National Association of Mutual Insurance Companies, said that 'Insurers are not permitted to use and do not use factors like race, income, religion, and/or ethnicity in setting rates. This is true in Illinois and in every state.' But the organizations defended the criteria that are used to set rates. 'Allowing insurers to continue using a wide set of objective criteria to determine risk and set rates will ensure this market can continue to flourish,' the statement read. 'We oppose efforts to limit the actuarial process that has driven companies out of other large states and led to increased premiums for the majority of policyholders.' Another bill that has languished in the legislature, which would affect homeowners as well as auto insurance, would require insurance companies to open their books so that state officials can assess whether the rate increases are too burdensome. Insurers would need to provide information on their rates to the state's Department of Insurance '60 days in advance of a proposed aggregate rate change of 5% or more.' This legislation has the backing of the Pritzker administration and could be the subject of debate during the two-week veto session in October since lawmakers and the insurance industry were busy during the spring session haggling over the bill's details. According to the secretary of state's office, Illinois is one of only two states, the other being Wyoming, that doesn't require a rate review process to protect auto insurance customers from excessive rates. The influence a person's economic status has on their insurance rates has long been a point of contention. Two years ago, the Consumer Federation of America issued a 25-page report showing the impact of car insurance rates when consumer credit information for good drivers who have decent or bad credit scores are factored in by insurers. The 2023 report showed that Illinoisans who were safe drivers with excellent credit paid an average annual premium of $424 for auto insurance, while consumers with a comparable driving record and fair credit paid around $607. At the same time, the report notes, safe drivers with poor credit paid an annual average of $915. These findings were echoed nationally, according to the report. 'These credit disparities are connected to systemic biases against Black, Latino, and Indigenous communities and long-standing structural hurdles to achieving financial stability for communities of color,' the report said. 'When credit information is used to construct credit-based insurance scores for underwriting and rating auto insurance, the result is higher auto insurance premiums for drivers of color.' 'Insurance companies use these rating factors, these non-rating factors, significantly, to set rates, and that can lead to both discriminatory and absurd outcomes,' said Abe Scarr, director of the Illinois Public Interest Research Group, which posted the report on its website. 'Also, it's, I think, somewhat less pronounced and maybe less investigated as well, but they're doing this with homeowners insurance as well.' Under a bill pushed by Giannoulias' office during the spring legislative session, the secretary of state, in partnership with the Office of Risk Management and Insurance Research at the University of Illinois, would look into 'the use of ZIP codes, credit scores, and age in ratemaking and whether the specific factor results in inequitable rates being assessed to certain populations.' The bill had 16 Democratic House sponsors and 17 Democratic Senate sponsors. It passed through the Democratic-controlled House in April on a 70-39 vote. But it never made it through the Senate. State Rep. Jeff Keicher, a Republican from Sycamore who sits on the House Insurance Committee and opposed the bill, said Illinois has one of the lowest rate environments 'given the factors that we are currently using.' The competitive market helps consumers because if the rates are too high with one carrier, they can easily move to another. He said eliminating factors such as where a customer lives and their credit score could increase the rates for suburban drivers. 'So you'd have a rate in Chicago the same as a rate in the middle of a cornfield in Illinois,' said Keicher, a 30-year insurance agent who said he was not speaking on behalf of the industry. 'The industry has proven time and again that that credit-based score is effective and accurate, and there have been no other challenges once regulators have looked at the direct correlation in accident propensity with the factors that insurance companies are currently using,' Keicher said. Kevin Martin, executive director of the Illinois Insurance Association, said there have been a number of studies over the years purported to show credit scores are an appropriate metric, including one that concluded 'better credit scores correlate with lower insurance risk.' As for Giannoulias' bill from the spring, Martin's group had concerns over whether the secretary of state's office's involvement in the study would've led to a 'very, very biased result,' noting the office has come out 'very much opposed to allowing us to use these factors.' 'We have no objections to having a study,' Martin said. 'We were opposed to any reference and any language that would have put (the) secretary of state's office in a position to conduct, lead and write the report.' Lou Sandoval, president and CEO of the Illinois Chamber of Commerce, which advocates for businesses in the state, echoed Martin's criticism of the bill. 'We're not against transparency of trying to say, 'Hey, listen, what should we get done?'' he said. 'What was problematic is the bill sought to do a study that basically abided with the (confirmation) bias of the bill itself.' 'It was like, 'we're going to do a study to confirm the fact that there's racist policies in place, not to identify what the policies are and whether they're racist or not.' It's like 'we have a thesis. The thesis is, this is racism, and that's the direction we're going,'' Sandoval continued. 'And you know, writ large, we have a problem with government basically stepping in and whacking industries that are major employers in the state.' The statewide advocacy campaign being launched by the secretary of state's office, dubbed 'Driving Change,' will ask state residents 'to share their stories about unfair and discriminatory ratemaking practices employed by auto insurance companies,' according to a news release from Giannoulias' office. There will be town halls on the issue over the next several weeks throughout the state, and the secretary of state's office would be conducting a study using feedback from residents to determine whether factors such as credit score, ZIP code and advanced age unfairly raise insurance premiums for residents. From there, the feedback could be used to aid in crafting new legislation over what factors to include when setting car insurance rates, the secretary of state's office said. Locations and times of the town halls would be posted on 'To me, it doesn't matter whether you live on the South or West side of Chicago or in rural southern Illinois,' said Giannoulias, whose name has been floated as a potential Chicago mayoral contender in 2027. 'Our point is, base it on driving record.'
Yahoo
18-07-2025
- Automotive
- Yahoo
Does car insurance cover hail damage?
If hail strikes your car during a storm, it could result in minor scratches or dings or a serious problem like a cracked window, windshield, or major body damage. Your auto policy may help cover the costs of hail damage, but you'll need a type of coverage called comprehensive insurance. In this article, we'll cover the basics of car insurance and hail damage, including how coverage works and the basics of filing a claim. This embedded content is not available in your region. Learn more: How does car insurance work? The basics explained. What type of car insurance covers hail damage? Comprehensive coverage is the type of car insurance that covers you against hail damage. According to 2022 data from the Insurance Information Institute, 80 percent of insured drivers purchase comprehensive coverage in addition to liability insurance, and 77 percent buy collision coverage. Here's a bit more about each of those coverages: Liability insurance: Helps pay for medical bills and legal expenses if you cause a crash that injures someone else or damages their property. Liability insurance is required by nearly every state. Collision insurance: Covers some costs of repairing or replacing your vehicle if it's damaged in a crash. Collision insurance isn't a legal requirement in any state, but most lenders require it as a condition of leasing or financing a vehicle. Comprehensive insurance: Kicks in if your vehicle is stolen or vandalized, or is damaged by a severe weather event (like hail, storms, hurricanes, floods, or earthquakes), a falling tree or object, or a collision with an animal. Like collision insurance, comprehensive insurance isn't state-mandated but is a common auto-lender requirement. Is there a deductible for comprehensive insurance? Yes, both comprehensive insurance and collision insurance typically have a deductible, which is an amount you'll have to pay out of pocket before coverage kicks in. (However, depending on your state and insurer, a deductible might not apply if you need your windshield replaced.) Choosing higher auto insurance deductibles often lowers your car insurance premiums, whereas lower deductibles usually come with higher premiums. Does liability cover hail damage? No, liability insurance doesn't cover hail damage. Liability coverage is required in most states and kicks in when you're legally responsible for a crash that injures someone or damages their property, while collision insurance (which isn't required in any state) covers hail damage. If you only carry state-mandated auto insurance, you'll have to foot the bill for hail damage on your own. How to file a car insurance claim for hail damage If your car sustains hail damage, you'll need to file an auto insurance claim for reimbursement. You can do so by following these steps: Check your policy and deductibles. Before starting a claim, check your policy to confirm that you have comprehensive coverage and make note of your deductibles. If the damage is fairly minor, repair costs could be lower than your deductible, in which case you wouldn't bother filing a claim. Contact your insurer. You can often initiate your claim by phone, online, or through a mobile app, depending on your insurer. Document the damage. Take photos or videos as evidence after your car is damaged by hail. You can send the images or video to your carrier or insurance adjuster after you've filed the claim. Get an estimate. Your insurance company will likely send an adjuster to assess the damage. However, some insurers require you to get an estimate on your own. Your insurance company will use the estimate to determine your payout. Have your car repaired or replaced. Once your claim is approved, you can take your car to whatever repair shop you choose. Your insurer will send the payment directly to the mechanic. If your insurer determines your car is totaled or damaged beyond repair, they'll cut a check for the value of the vehicle to you. Your insurer will subtract your deductible from any payout it makes. Up Next Up Next What is the average insurance payout for a hail-damaged car? According to State Farm data, the average insurance payout for a hail-damaged car was around $5,000 in 2021. Your exact payout will depend on repair costs (if the car is salvageable) or the car's actual cash value (if the car is totaled), and your deductible. Your payout will be capped at your policy's limit. Will my insurance go up if I file a claim for hail damage? Filing a comprehensive insurance claim for hail damage typically won't increase your premium, as you're not at fault. However, you could still see your rates rise after a major hailstorm or another severe weather event as insurers attempt to recover their losses. Insurers also adjust their risk models to estimate the likelihood of similar events following a major disaster, which can lead to higher rates. Learn more: How much does car insurance increase after an accident? How is hail damage repaired? If your vehicle has minor cosmetic hail damage, a body shop may be able to repair it using a technique called paintless dent repair. The repair shop will repair dents using tools to gently apply pressure to the backside and stretch the metal until the dent disappears without repainting or refinishing the surface. However, if hail causes the paint to chip away, more extensive repairs are usually needed. Your car will also require substantial repairs in some circumstances, like if the windshield shattered or your car doors or trunk won't open due to the hail damage. Can hail total my car? Yes, hail can total your car, particularly after a major storm. Your insurer will compare the estimated repair costs against your vehicle's cash value. If repair costs exceed the car's market value immediately before the damage, your insurance company will total the vehicle. You'll receive a check for the car's actual value minus the deductible, up to your policy's limits. Do I have to fix hail damage with insurance money? Your lender may require you to use insurance proceeds to repair hail damage if your car is financed or leased, since the lender has a financial stake in your vehicle's condition. If your car is totaled and you still owe money on it, your insurer will pay the lender first to satisfy the lien and send you any remaining funds. Your payout will go directly to the leasing company if you lease your vehicle. You have a lot more leeway in deciding how to use insurance money for hail damage if you own your car outright. If your car's hail damage is only cosmetic, you can usually pocket the check instead of using it for repairs as long as your policy doesn't prohibit it. Keep in mind, though, that even minor dents and dings will affect the car's resale value. If the damage poses a safety hazard (for example, if the windshield cracked) or affects how the vehicle operates, it's essential to get it repaired. Learn more: Does insurance cover windshield replacement? Is a hail damage claim worth it? To decide if a hail damage claim is worth it, you'll need to look at the extent of the damage and your deductible. If the damage is fairly minor and will cost less than your deductible to repair, filing a hail damage claim isn't worth it. But if the repair bill will significantly exceed your deductible, it's worth filing a claim with your insurance company. Tim Manni edited this article.
Business Wire
14-07-2025
- Climate
- Business Wire
Triple-I: Texas Home Insurance Market Impacted by Complex Mix of Natural Catastrophe Exposures
MALVERN, Pa.--(BUSINESS WIRE)--The Insurance Information Institute (Triple-I) today published an analysis of the property/casualty insurance landscape in Texas, revealing a complex risk environment that has contributed to the Lone Star State ranking as the sixth-least-affordable for homeowners insurance in the United States. 'The catastrophic flooding in Central Texas exemplifies a troubling trend we have seen with events like hurricanes Harvey, Ida, Ian and Helene – devastating flood damage occurring far from storm landfall." The devastating flooding that struck Texas Hill Country over the Fourth of July holiday weekend serves as a stark reminder of the state's evolving risk profile, according to Triple-I's new Texas Issues Brief. The flooding, caused by remnant moisture from Tropical Storm Barry, demonstrated how severe inland flooding related to tropical systems has become increasingly frequent and severe in recent years. 'The catastrophic flooding in Central Texas exemplifies a troubling trend we have seen with events like hurricanes Harvey, Ida, Ian and Helene – devastating flood damage occurring far from storm landfall,' said Patrick Schmid, Triple-I's chief insurance officer. 'In Kerr County, where the worst flooding occurred during the recent Hill Country disaster, only 2.5% of homeowners have flood insurance through the National Flood Insurance Program.' Multiple Risk Factors Drive Insurance Costs Texas faces an unprecedented combination of natural catastrophe risks: Severe Convective Storms: Texas experiences over 100 tornadoes annually – the most of any state – with highest activity in the Panhandle and North Texas. The state also recorded 878 hail events involving stones one inch or larger in 2024, again leading the nation. Lightning and Hail Damage: Texas recorded 4,369 homeowners' insurance lightning loss claims in 2024, second only to Florida, with an average cost per claim of $38,558 – significantly higher than Florida's $23,686 average. Wildfire Risk: With 244,617 homes at risk for extreme wildfire, Texas ranks third nationally behind California and Colorado. Grid Vulnerability: The February 2021 winter storm that caused catastrophic power grid failure across Texas and other states continues to influence the Lone Star State's risk profile, with 80% of insured losses from that event occurring in Texas alone. Affordability Crisis Deepens These combined vulnerabilities have resulted in Texas homeowners paying an average of 3.13% of median household income for homeowners insurance, making it the sixth-least-affordable state nationally. Personal auto insurance in Texas is more affordable at 1.65% of median household income, ranking 14th nationally. 'All insurance pricing needs to reflect the risk inherent in the coverage provided,' Schmid explained. 'For Texas homeowners, their poor affordability reflects the high levels of natural catastrophe risk – most notably, severe convective storms and hurricanes. Improving the resilience of homes, businesses and communities is essential to reduce the risk, improve affordability and save lives.' Triple-I Media Statement Read Triple-I's media statement regarding the Texas Hill Country flood catastrophe. Note to Media For media inquiries regarding the Texas Hill Country flood event or to arrange interviews with Triple-I CEO Sean Kevelighan, please contact Mark Friedlander at MarkF@ About the Insurance Information Institute (Triple-I) Since 1960, the Insurance Information Institute (Triple-I) has been the trusted voice of risk and insurance, delivering unique, data-driven insights to educate, elevate and connect consumers, industry professionals, policymakers and the media. An affiliate of The Institutes, Triple-I represents a diverse membership accounting for nearly 50% of all U.S. property/casualty premiums written. Our members include mutual and stock companies, personal and commercial lines, primary insurers and reinsurers – serving regional, national and global markets. About The Institutes The Institutes® are a global not-for-profit comprising diverse affiliates that educate, elevate and connect people in the essential disciplines of risk management and insurance. Through products and services offered by The Institutes' nearly 20 affiliated business units, people and organizations are empowered to help those in need with a focus on understanding, predicting and preventing losses to create a more resilient world. The Institutes is a registered trademark of The Institutes. All rights reserved.
Yahoo
09-07-2025
- Automotive
- Yahoo
How and when to file a complaint against your car insurance company
You're upset that your auto insurance company won't pay to repair your car after an accident. Perhaps you feel like they unjustly denied your renewal or spiked your premium when you've been a good driver all year. If you tried to explain your position to them without results, consider filing a complaint with the Department of Insurance in your state. 'They will investigate your complaint and work with the insurance company to resolve it,' said Janet Ruiz, spokesperson for the Insurance Information Institute in San Diego. According to data from the National Association of Insurance Commissioners (NAIC), tens of thousands of complaints are overturned each year. This embedded content is not available in your region. Learn more: How does car insurance work? The basics explained. It might be hard to know when it's worth going through the time and effort to file an insurance complaint. Here are the most common reasons consumers file complaints against their insurers: It's been weeks or months since you've filed a claim, but there's been no word whatsoever from the insurance company about a resolution You felt disrespected or mistreated by the claims adjuster The adjuster or your insurance agent mishandled your claim Your claim has been denied without an explanation Your settlement offer seems unfairly low, though they won't tell you why The insurance company refuses to issue you a policy or renew your existing policy without a valid reason You're quoted a higher-than-normal price on an auto policy that is not commensurate with your driving record, age, or other determining factors Learn more: How to switch car insurance companies First, find the link to your state insurance department's complaint process on the NAIC website — the search tool is halfway down the page. Most states will have online or written complaint forms that you can fill out, asking you to complete the following information: Your name, address, and telephone number The name of your insurer What type of policy and your policy number Your insurance agent's contact information, if applicable The nature of your complaint Any documents, photos, and correspondence with the insurer or your agent, including emails and texts that support your complaint The type of resolution you're looking for While the complaint process is similar across states, there can be marked differences. Below are four states' procedures to serve as examples. The California Department of Insurance provides an online form to file a complaint and downloadable forms that you can mail to the state. However, the department recommends that consumers file a complaint online, as mailing paper forms may delay the process. The Golden State's complaint form also informs consumers that if they have filed a bad faith insurance claim against their insurer regarding their dispute, the state will defer its investigation until the lawsuit has been decided in court or settled. However, consumers should still lodge a complaint with the state while the lawsuit is ongoing so the state can have a record of it. After the lawsuit is concluded, the consumer and their bad-faith attorney can submit evidence of insurance law violations. Learn more: Car insurance requirements in California — and ways to save money In the Garden State, formal complaints against insurance companies must be submitted in writing — in dark ink and with no highlighted sections so all information is legible. In addition to the standard information mentioned above, the New Jersey Department of Banking and Insurance also asks consumers to include a copy of their auto insurance ID card, a copy of the policy declarations page, and, if applicable, notices of either a nonrenewal, premium increase, or claim denial. Learn more: Car insurance rates are rising in New Jersey. Here's how to save. The Texas Department of Insurance offers thorough step-by-step guides walking consumers through the process of filing a complaint, with optional guides in Spanish. For help with an auto insurance complaint, the Lone Star State recommends consumers follow these steps: Step 1: First, talk to your insurance company to resolve the issue. If you disagree with their decision, let them know why. Step 2: Ask your insurer for an appraisal. It's a three-appraiser process; The insurance company will provide its own appraiser; you hire and pay for your own appraiser; and you pay half of the cost for a third appraiser, chosen by the other two appraisers, to serve as the 'umpire.' Step 3: File a complaint with the state if you disagree with the appraisal results or if you believe your insurer violated any laws. The department details what it can do to resolve issues and what it can't do, like overrule the decision regarding who was at fault in an accident. Step 4: The department will contact the insurance company, which has 15 days to respond to the complaint, with an option to extend that time for another 10 days. Then the department will let you know how the insurer's response impacts your complaint. Step 5: If you are dissatisfied with the results of your complaint, the department provides resources to obtain legal help from a bad-faith attorney. Learn more: Car insurance costs are big in Texas. Here's how to get the cheapest rates. In Colorado, consumers are urged to first contact the Colorado Division of Insurance to explain their situation so a complaint analyst can determine whether the agency can help them and what that assistance would look like — including helping them file a complaint, said Bobbie Baca, the division's director of consumer services for property, casualty, and title insurance. 'While complaints are often warranted, it often happens that a complaint results from a misunderstanding of the complicated world of insurance,' Baca said. 'Complaint resolutions may include claim settlements, facilitating communications, and reversal of non-renewals or cancellations.' Indeed, a total of $4,995,340 last year was recovered for Colorado consumers through the division's investigations into their auto insurance complaints, according to the FY 2023-24 Colorado DOI Annual Complaint & Recoveries Report. It's best to file a complaint with your state's insurance department rather than with the Better Business Bureau or on other sites. The state departments are officially designated to process complaints and are the only ones that can take enforcement action if necessary. Below are five tips to help you file a complaint against your car insurance company, from how to go about it alone to when it's time to seek legal counsel. Tip 1: Start with your insurance agent. Try to resolve the issue first with your insurer or agent, and if they are not willing or able, ask for their supervisor's contact information. 'If you are still not satisfied, let them know that you will file a complaint with the Department of Insurance,' Ruiz said. 'They may be able to find a resolution without going through the complaint process.' Tip 2: Know when to skip the phone call. If the concern is directly related to the behavior of your agent, it may be better to skip calling your state's insurance department and file a complaint first, Baca advised. Tip 3: Compile supporting financial evidence. When including documents to support your complaint, be sure to have estimates from body repair shops and other figures disputing the insurer's decision. Tip 4: Locate an arbitrator. See if the terms of your policy dictate that you first go through either an arbitration or appraisal process with the insurance company. You can find an arbitrator from the American Arbitration Association. Tip 5: Consider a bad-faith attorney. As a final option, you may want to hire a bad-faith attorney, though state insurance departments typically offer their services for free, Baca said. 'We can answer a lot of questions, provide education, point people in the right direction, and if it is something we can investigate, we can help them file a formal complaint,' she said. 'If the division is unable to assist the consumer, that is when they may want to consider talking with an attorney.' Remember, once you hire an attorney, you will no longer be able to communicate directly with your insurance company, Ruiz advised. Tim Manni edited this article.
Yahoo
09-07-2025
- Climate
- Yahoo
Survivors describe catastrophic Texas flooding, ask "how are we going to move forward?"
Authorities continued their rescue and recovery missions in Central Texas on Tuesday as the death toll from last week's catastrophic flooding surpassed 100 people. Meanwhile, insurance experts have expressed concern over the coverage gap across Texas as the state becomes more susceptible to severe flooding driven by climate change. CBS News Texas reporter Bo Evans has more and Mark Friedlander, senior director of media relations at the Insurance Information Institute, joins "The Daily Report" to discuss.
