A small group gathered just outside the state capitol of Illinois Wednesday afternoon, calling for better insurance industry practices and fair premiums. The group, consisting of consumer advocates, marched to the state capitol under the direct leadership of State Senator Martha Scott.
For several months now, different consumer advocacy organizations have been calling on lawmakers and state officials to regulate how insurance companies come up with premiums. Traditionally, insurance providers rely on a host of factors and risks to determine rates. Some insurers have even resorted to basing risks on their clients’ residence. While statistics often suggest that some areas or regions are more risky to live in, thus resulting in higher premiums for car owners, critics say the practice is unfair.
Insurance firms are also known to come up with rates based on motorists’ occupation and education level. Many vocal critics say that the practice of selective assessment is discriminatory and should be considered illegal. Auto insurance companies, for their part, say that they need to know more information about their policyholders to provide accurate assessment of risk and come up with the right insurance premiums.
They also argue that some areas have relatively higher car crime incidence. This can be a crucial factor in determining the correct rates, especially if the policyholders’ cars are particularly prone to car theft. Insurers also explain that some occupations expose some motorists to more risks and can lead to more time on the road. Journalists and real estate agents are generally some of the policyholders with the highest insurance premiums. Their extended stay on the road means that they are more at risk of getting into accidents, resulting in higher rates.
Critics also claim that many providers place emphasis on the educational attainment and level of their policyholders when determining rates. They point out that this is unjust especially since not all motorists in Illinois can afford to go to college or pursue higher studies. Insurers, on the other hand, cite statistics, saying that car owners who have reached higher educational levels are less likely to get into accidents. They also claim that these car owners are significantly more responsible behind the wheel, thus the lower premiums.
The consumer advocates who protested industry practices said that they have introduced several bills aimed at leveling the playing field for insurance companies and motorists alike. Scott, who is a vocal critic of the insurance industry, points out that the state of Illinois ranks 12th among all other states when it comes to insurance expenses. She also says that car owners from Detroit actually shell out $5,000 each year for auto insurance, the highest in the U.S.