Geico increases auto insurance rates in Illinois by 17% on average for most long-term customers and 34% for those who have stayed in the past two years.
The price change, disclosed yesterday in a filing with the Illinois Department of Insurance, may be the largest increase in car insurance ever for a major carrier in Illinois – certainly in the last two decades.
This distinction is a bit ironic since Geico, based in Chevy Chase, in Md., Has been relentlessly announcing in recent decades how 15 minutes can save drivers 15% or more on insurance. But Geico, like other car insurers, is struggling to keep up with the rapid rise in claims settlement costs.
The peak is also notable since Geico has increased rates twice in less than a year – both to 6% clips.
Including all three rate increases, drivers with Geico Casualty, the unit that insures most customers in the long run, have seen their premiums increase $ 470 a year, or $ 39 a month, when they renew later. The 17% increase goes into effect on August 19, according to the schedule.
Most recent customers, insured by Geico Secure, will see their premiums grow by $ 508 a year on average with growth of 34%. That comes to $ 42 per month.
Geico was already losing ground in Illinois before this dramatic growth. Over nearly three years, the company’s auto policies in the state have fallen by 5% to 381,437 from 403,136, according to insurance department filings. Geico is the fourth largest auto insurer in the state. The top three are Bloomington-based State Farm, Allstate-based and Northbrook-based Progressive Cleveland-based Progressive.
Geico’s move also coincides with pressure on the industry from state senators to provide more relief to drivers after insurers picked up excessive profits in 2020 and early 2021 when rush hour ended. effectively because of COVID. On industry objections, state regulators have recently disclosed profitability for all car insurers from 2019 to 2021.
Geico Casualty’s profits in Illinois in 2020 and the first quarter of 2021 were $ 87 million, a profit margin of 15%. In the last three quarters of 2021, profit was restricted to $ 15 million, a margin of 5%.
Meanwhile, the price of the latest customers in Illinois has clearly been a struggle for Geico. Geico Secure, to which all new customers will be assigned by mid-2020, lost $ 25 million insuring Illinois drivers in 2021. It was only $ 106 million in premium.
Geico does not provide press contacts, so there is no ability to request comments.
The encounter for the company perhaps best known for the ubiquitous lizard on television is impressive given the success it has had over the past 25 years. It went from a small car insurer to the second largest in the country as a first to adopt direct internet sales, which allowed Geico to offer insurance at lower prices than incumbent agents such as State Farm. and Allstate.
Allstate in recent years has moved to compete more effectively by moving aggressively through the direct sales channel. Allstate policies are a 7% lower price for customers who sign up online or over the phone instead of with an Allstate agent.
While Geico so far is the most aggressive in terms of tax increases, Allstate, Progressive and to a lesser extent State Farm have all done the same this year. Allstate imposed a 12% increase on average earlier this year, and Progressive raised prices between 8% and 10%. State Farm also increased its rates by 8%.