Illinois car insurance market doesn’t need more regulation

Ignoring data points that have proven to correlate to future claims makes it impossible to give every driver the rate they deserve.

SHARE Illinois car insurance market doesn’t need more regulation
Vehicles travel northbound on the Kennedy Express way near West Montrose Avenue.

Vehicles travel northbound on the Kennedy Express way near West Montrose Avenue.

Tyler Pasciak LaRiviere/Sun-Times

Ramping up regulatory requirements for Illinois insurers seems to be a solution in need of a problem. There is nothing wrong with the automobile insurance market in Illinois that more regulation needs to “fix.”

Our market is healthy, insurance consumers have countless choices, and the price for auto insurance in our state is below the national average. More regulation may, in fact, tap the brakes on what is currently an efficient, consumer-focused insurance marketplace.

Among those clamoring for increased insurance regulation are people critical of using a range of factors to measure risk and price auto insurance. However, using these factors is the fairest way to price insurance.

Some groups will likely be equally critical when they learn what happens to pricing when differentiators are eliminated. All drivers will pay more. Why? Because ambiguity has a cost. Ignoring data points that have proven to correlate to future claims makes it impossible to give every driver the rate they deserve. Good drivers will pay more than they should when uncertainty forces risk to be spread more broadly.

SEND LETTERS TO: We want to hear from our readers. To be considered for publication, letters must include your full name, your neighborhood or hometown and a phone number for verification purposes. Letters should be a maximum of approximately 350 words.

Insurance is a data-driven business. Any data point that helps bring accuracy to pricing means policyholders pay an amount that best matches their personal risk profile. Although insurance is pooled risk, everyone in the pool should not pay an equal share if they represent more than their fair share of risk.

Safe drivers deserve better. That is why insurers use different rating factors to differentiate good drivers from those who may appear to be an accident waiting to happen. This is all about putting the consumer first. Fairness above all else.

Some of the rating factors an insurer may use to properly price insurance protection includes one’s credit score or other demographic details that have proven accurate in predicting the likelihood and cost of claims. Not every insurance company uses the same factors. This is good news, because consumers are truly in the driver’s seat and can shop around for options.

Illinois is a buyer’s market for insurance, with more than 200 auto insurance companies competing for business. Why tamper with something that is working so well?

Lynne McChristian, senior instructor and director, Office of Risk Management & Insurance Research, University of Illinois at Urbana-Champaign

Don’t use TIF money for La Salle Street

It’s depressing to see “City planning agency focuses on 6 renewal projects for La Salle St.” in the Sun-Times. The proposed use of TIFs to fund this is appalling. Their use was predicated on “blighted areas,” this certainly not being one of them.

And the effects are felt for 23 years. With the Feb. 28 election coming, the mayoral and aldermanic candidates should be responding to this rather than each other.

COVID and climate change have altered office work, buying practices, travel, etc. If we can’t adapt without feeding from the public trough, we’re in trouble.

I sure hope the people of Chicago rebel at the Zoom event scheduled for March 2. Those elected should take a crash course on TIFs offered by Tom Tresser’s “Civic Lab.” As far as the developers, they should bugger off.

Fred J. Wittenberg, Evanston

The Latest
During his rehab, Mueller became a father for the first time.
Advocates pushing President Biden to make this drastic, legally questionable move should stick with more reasonable measures to help a smaller number of undocumented immigrants, including DACA recipients.
This year’s draft class had the potential to be a total bust because several stars, including Clark, could have opted to return to college for a fifth season. Clark declared for the Draft in February, and a number of her peers followed, helping make this one of the deepest draft classes, and arguably most consequential in league history.
The Sky own the No. 3 and 8 overall picks, a result of some costly deal-making by first-year general manager Jeff Pagliocca.
He’s a great guy who says he texts his former girlfriend because he cares about other people.