Home insurance Chicago Auto Insurance Rates: Lower Auto Insurance Premiums Projected for Illinois in 2011

Chicago Auto Insurance Rates: Lower Auto Insurance Premiums Projected for Illinois in 2011


Despite the credit crunch that is draining most companies, the insurance market shows no sign of intense downside, as it has with some others. The insurance business is a recession-proof business, meaning that no matter what happens in the national economy, people still need to buy and issue insurance policies. In reality, some people argue that since insurance is a security need, people tend to be more concerned with their security concerns during these painful times, increasing the demand for insurance coverage.

So while we have elements that are pushing prices up, such as the credit crunch, other elements are pulling prices down – such as lower interest rates, deflation and a long-suffering economy. The overall direct result appears to be lower demand for auto insurance. As demand falls, more insurers are realizing that they are committing to being underpowered with their insurance premiums.

Based on the publications of the National Association of Insurance Commissioners, [naic.org] Average premiums and expenses in 2007 were $794 per year per insured vehicle, as opposed to $830 in 2003, nationwide. More recent records, according to the Wall Street Journal [online.wsj.com/article/SB122947388659212351.html] indicate insurance premiums rose 3.8% nationwide in November [2010] from a year ago, according to the consumer price index of the Ministry of Labor.’

According to the National Association of Insurance Commissioner, Illinois’ average premiums and expenses were set at $723 in 2007, compared with $1,140 in DC and $1,104 in New Jersey State and $1,047 in New York State, for the same year of 2007 .

The auto insurance industry in Chicago is one of the unique financial services industries in America. First, the market is too big, which usually makes it inviting and easy for auto insurance companies to get into. In fact, in recent months, a handful of auto insurers have been rebranded from scratch to provide Chicago with low auto insurance rates. Second, there are a number of insurance companies in Chicago that are aggressively competing with each other based on premiums and rates. Finally, Chicago auto insurance rates are among the most reasonable premiums in America due to the fact that Illinois state guidelines are not as strict as other states like New York for example.

There are more than 2,500 publicly traded insurance agencies with an address in the city of Chicago. These agencies are either captive agencies – the agent within the agency belongs to only one company such as Allstate Insurance and State=Farm Insurance, – or independent agencies such as Insure One or Insurance Navy. Most captive agencies are credit-driven, meaning the rate quoted is largely determined by the credit of the requesting client. Independent agencies have more freedom in the legal representation of their insurers. Unlike the captive system, the independent agency system allows agents to quote customers at many companies at the same time, some of these companies may work with credit prices and others may not, giving the customers plenty of quotation alternatives.

Some people assume that the brokerage scheme does not offer top insurers. In fact, the opposite is true. Most of the highly regarded insurance companies such as AAA, Travelers, Safeco and many others use the independent agency system, not the captive system. Independent agents, unlike captive agents, offer more options, more prices, and more features.


Please enter your comment!
Please enter your name here