Illinois Secretary of State Alexi Giannoulias targets car insurance rate discrimination

Finally, someone is taking insurance companies to task. Illinois Secretary of State Alexi Giannoulias recently drafted a bill that would base car insurance rates on driving records and not socio-economic factors that can be used to discriminate against consumers.

Under current state law, insurance companies can use data from sources like social media to charge higher insurance premiums based on race, ethnic origin, religion, gender, sexual orientation, age, marital status or a disability.

In Illinois, 70-year-old drivers pay on average 12% more than 60-year-old drivers, while 75-year-old drivers pay 25% more for a full coverage policy.

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But in its 2020 report, the federal Centers for Disease Control found “older adults are more likely to have safer driving behaviors than other age groups.”

At age 74, I likely pay more for car insurance than my adult children and they pay more for car insurance because they have young drivers in their household.

In 2019, Chicago Sun-Times reporter Stephanie Zimmermann found “renting rather than owning a home or working in an unskilled job could mean paying an extra $117 to $175 a year, for car insurance. Living in the ‘wrong’ ZIP code could mean an added $175.

”It always struck me as unfair that insurance companies could consider factors other than my driving record when charging me for something I legally have to purchase. I wondered how insurance companies got away with what appears to be sanctioned discrimination.“

It is perpetuating inequities based on race and income that were formed by inequitable decisions decades ago," Brent Adams, senior vice president of policy and communication at the Woodstock Institute told the Sun-Times. "It is kicking people while they’re down in a whole host of ways."

The discriminatory practice of charging drivers more for car insurance based on socio-economic factors also could explain why some motorists drive without car insurance.

As it is, “U.S. drivers are paying an average of $2,543 annually or $212 per month for car insurance, an increase of 26% from last year,” according to a recent report from Bankrate, a personal financial management company.

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Car insurance rates went up again for Illinois drivers last year, analysis shows

Giannoulias’ legislation is aimed at preventing insurance companies from using consumer information such as credit score, zip code, home ownership status, purchasing habits and level of education to unfairly determine rates.

"The purpose of auto insurance is to protect motorists while they drive; therefore, an individual's driving record should serve as the primary factor analyzed when setting rates," Giannoulias said in a news release.“

This emphasis on socio-economic factors is transparently unfair and discriminatory, leading to less availability and less attainability, especially those from disadvantaged neighborhoods and communities of color,” he said.

The proposed legislation, HB 4611, is sponsored by State Rep. Thaddeus Jones (29th District) and State Rep. Napoleon Harris III (15th District). “All motorists should have the opportunity to attain affordable insurance. There’s no place for discrimination in our state or in our country, particularly in the insurance industry,” Harris said.

“Completely irrelevant factors like whether you own a home or where that home is located should never be a barrier to your ability to secure insurance and to drive," Jones said in a news release.

He added the proposal would provide "an opportunity to make Illinois roads more equitable while keeping them safe. "Hopefully, this kind of discrimination will soon become a thing of the past but that can’t happen without you. I’ve received numerous complaints from readers about this very topic, especially as it pertains to age. If you support the plan, let your representative know. It’s never too late for change.