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Bill some warn could raise auto insurance rates on senior drivers stalls

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(The Center Square) – House Bill 4611, another measure that is of priority of the Illinois Secretary of State, has stalled. The measure limiting factors that auto insurers can use to set rates didn’t advance before last week’s deadline.

Secretary Alexi Giannoulias responded to concerns that the measure he’s supporting will raise auto insurance rates on senior drivers.

“When we learned people are paying more for car insurance based on their credit scores and zip codes, that sounds fundamentally discriminatory and unfair, but maybe there’s a good reason for it. So we reached out to insurance companies and asked, ‘what are the reasons why insurance rates are not based on the way they drive but where they live?’ We weren’t given satisfactory answers,” said Giannoulias. “They also did not deny that people who live in poor neighborhoods are paying more.”

State Rep. Jeff Keicher, R-Sycamore, who Giannoulias pointed out sells insurance, said in committee that senior drivers naturally have better credit scores and will see an increase if the bill becomes law. Keicher has said he would make more money if the bill becomes law because he’s commission-based.

The chair of the insurance committee, state. Rep Thaddeus Jones, D-Calumet City, urged members to consider the amendments and get the bill out of committee.

The bill never left committee.

“Nobody wants to study … until 2028. That’s the issue that has been hanging [the bill] up in committee. We made a compromise to do the study in 2025-2026. Plus this is all depending on if the governor signs the bill. This is a good bill,” said Jones.

Jones said House Bill 4611 aimed to outright ban credit scores as a determining factor when setting auto insurance rates. However, there were amendments made with the industry.

“The underlying bill says they’re going to ban credit scores, it was a Secretary of State initiative, but now we worked with their office and the auto insurance industry to look at an Illinois-based study that looks at credit scores and other discriminatory factors to see if those discriminating factors are rising up car insurance rates,” said Jones.

Giannoulias said the bill is important and this type of legislation has been passed in other states.

“All we’re saying is one of two things: These insurance rates should be based on someone’s ability to drive and their track record of being a safe driver, or give us a reason why this algorithm of using people’s credit score should determine the price they pay for insurance,” said Giannoulias.

According to NerdWallet, the average cost of a full-coverage car insurance policy in Illinois is 23% cheaper than the national average. Opponents of the bill say it’s because the state currently allows free-market practices that allow auto insurance companies to compete and more regulations will cause insurance rates to go up.

Some other states where similar legislation has emerged are Colorado, New Jersey and New York.

New projections from the Bureau of Labor Statistics and other reports indicate Colorado has among the highest car insurance premiums in the country. Since 2013, the state’s average car insurance premiums have increased roughly 53%.

The average annual premium for auto insurance in New Jersey stands at $2,555, which is $12 above the national average. The average car insurance rate in New York is $1,582 per year, which is about 11% more than the national average.

This isn’t the only bill the Secretary of State has prioritized that has stalled. House Bill 4567, which would enhance penalties for those who transmit “offensive and lewd” behavior toward a librarian, was pulled from the record by the bill’s sponsor last week.