National General Insurance Company submitted a request to the Illinois Bureau of Insurance to increase the premiums for its auto insurance customers in the state by an average of 23.1%.The filing was approved as of September 12, 2017.
Policies written for new customers will have been affected by the change on or after September 15, 2017. The rate impact will have been enacted for current policyholders on or after November 20, 2017, should they choose to renew.
National General proposed rate impact
Premiums are estimated to increase for 8,566 policyholders in Illinois by an average of $353 per policy. As with most increases, though, the impact will be spread unevenly, with some policyholders receiving increases lower than that figure and other receiving larger hikes. In percentage terms, the company reports the proposed rate changes will range from 4.8% to 102.3%.
As of 2016, National General ranked 64th among auto insurance carriers who are active in the state. The Illinois auto insurance market is highly concentrated. State Farm, commanding more of the market than any other carrier, holds 32.1% of all policies in the state. National General is a very small player in the Illinois marketplace, with 0.1% of the auto market share.
How these increases compare
These hikes are among the highest rate increases to go into effect for auto insurance in Illinois in 2017. Among the 12 largest companies in the state, all have been approved for rate changes by regulators. The average increase in premiums arising from those decisions is 3.0%. Within the approved list, the largest hikes were for American Family Insurance Group (with an average increase of 6.8%); Farmers Insurance Group (5.6% on average); and Liberty Mutual Group (5.6% on average). So far, only one company, Progressive Group, has been approved for a rate decrease (of 4% on average) by regulators.
When compared to the rest of the U.S., car owners in Illinois enjoy some of the cheapest auto insurance. Premiums are 9% less expensive than the average premiums for car owners in the country as a whole, with our sample Illinois policyholder facing an average annual fee of $1,370 to insure their cars.
That annual tab translates into an average monthly cost of $114, which makes Illinois the 20th cheapest state for auto insurance in the U.S. Illinois's neighbors, Indiana and Missouri, are on the cheaper end of the spectrum, paying an average of $100 and $101 respectively for our sample policyholder. However, just to the southeast of Illinois is Kentucky, where car owners face more expensive premiums in the nation, at $125 per month on average for our benchmark car owner.
Changes to penalty points system
In its rate filing, National General announced changes in their demerit points system. The changes to this system affect bodily injury premiums, property damage, and collision. Getting 1 penalty point on your license will increase your bodily injury premium by 30%. Policyholders that accrue more points should expect a rough 20-30% increase in their premium(s) per point for the first few points depending on whether they're in the ABM or AFF customer group.
The changes, separated by customer group, can be found in the table below.
|Customer Group||Violation Points||Bodily Injury||Property Damage||Collision|