House Bill 4611, a bill of high priority for the Illinois Secretary of State, has hit a roadblock. The deadline for the measure, which aims to restrict the criteria used by auto insurers to determine rates, passed last week without any progress.
Secretary Alexi Giannoulias addressed concerns regarding the potential increase in auto insurance rates for senior drivers under the measure he is endorsing.
According to Giannoulias, the practice of charging higher car insurance rates based on credit scores and zip codes is perceived as discriminatory and unfair. In an effort to understand the reasoning behind this, insurance companies were questioned about why rates are determined by location rather than driving habits. However, the answers provided were not satisfactory, and it was not denied that individuals residing in low-income neighborhoods are indeed paying more.
State Representative Jeff Keicher, a Republican from Sycamore, raised an interesting point during the committee meeting. Keicher, who happens to work in the insurance industry, pointed out that senior drivers generally have better credit scores. If the bill were to pass, these drivers may experience an increase in their insurance rates. Keicher candidly admitted that he would personally benefit from the bill becoming law due to his commission-based income.
State Representative Thaddeus Jones, D-Calumet City, passionately urged committee members to carefully consider the amendments and move the bill forward.
The committee ultimately failed to advance the bill.
According to Jones, the bill has been facing a delay in committee due to the requirement of a study that wouldn’t be completed until 2028. However, a compromise has been made to conduct the study in 2025-2026. The fate of the bill ultimately rests on the governor’s decision. Jones believes that the bill is a positive step forward.
According to Jones, House Bill 4611 initially sought to completely prohibit the use of credit scores as a deciding factor in determining auto insurance rates. However, there were subsequent amendments made in collaboration with the industry.
Jones stated that the proposed bill aims to ban credit scores, which originated from a Secretary of State initiative. However, collaborative efforts between their office and the auto insurance industry have led them to examine an Illinois-based study. This study investigates the correlation between credit scores and other discriminatory factors and the impact they have on car insurance rates.
According to Giannoulias, this bill holds significant importance, as similar legislation has already been successfully passed in other states.
Giannoulias emphasized the need for insurance rates to be determined based on an individual’s driving ability and safety record, rather than relying on an algorithm that uses credit scores.
NerdWallet reports that the cost of a full-coverage car insurance policy in Illinois is 23% lower than the national average. Critics argue that this is due to the state’s current implementation of free-market practices, which fosters competition among auto insurance companies. They contend that imposing more regulations could potentially lead to an increase in insurance rates.
Legislation similar to this has also emerged in other states such as Colorado, New Jersey, and New York.
According to recent projections from the Bureau of Labor Statistics and other reports, it has been revealed that Colorado is experiencing some of the highest car insurance premiums in the entire country. Over the past few years, the average car insurance premiums in the state have seen a significant increase of approximately 53%. This data highlights the growing concerns and financial burden faced by car owners in Colorado when it comes to securing adequate insurance coverage for their vehicles.
In New Jersey, the average annual premium for auto insurance is $2,555, just slightly higher than the national average. Meanwhile, in New York, the average car insurance rate is $1,582 per year, which is approximately 11% higher than the national average.
The Secretary of State has encountered obstacles in advancing multiple bills, including House Bill 4567. This particular bill aimed to strengthen penalties for individuals who engage in offensive and lewd behavior towards librarians. However, the bill’s sponsor decided to withdraw it from consideration last week.
