From the bustling energy of Chicago’s Magnificent Mile to the quiet charm of a drive through Starved Rock State Park, it’s always easier to get around Illinois when you have a car. But just like adapting to changing road conditions, it’s also wise to stay ahead of shifts in the costs associated with driving, especially when it comes to your car insurance.
What’s Happening?
Encompass Insurance, a subsidiary of Allstate Insurance, was recently approved for a rate adjustment for its car insurance policies in Illinois.
Effective for renewal business starting on June 17, 2025, Encompass will be increasing its auto insurance premiums by an average of 9.9%. This adjustment is projected to increase the total annual premiums for its Illinois policyholders by roughly $10.7 million.
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Why Do Car Insurance Rates Change?
It’s a common question: Why do insurers increase their rates? It’s often influenced by a confluence of factors that impact the overall cost of providing coverage. Here are some of the primary drivers behind premium adjustments:
- Inflation and Repair Costs: The most significant factor in recent years has been the rising cost of, well, everything. Inflation affects the price of car parts, from simple bumpers to sophisticated sensors and cameras found in newer vehicles. Similarly, labor costs at repair shops have also increased. Modern cars, with their advanced safety features and technology, are often more expensive to repair after an accident, directly impacting the amount insurers pay out for claims.
- Accident Trends (Frequency and Severity): An increase in the number of accidents (frequency) or the average cost of those accidents (severity) in a specific area or across the board can lead to higher premiums. Factors like distracted driving, speeding, and more congested roadways can contribute to these trends.
- Severe Weather Events: Illinois is no stranger to unpredictable weather, including severe storms, hail, and even tornadoes. An uptick in claims due to weather-related damage can put financial pressure on insurers, necessitating rate adjustments to ensure they can cover future losses.
- Medical Costs: Auto insurance often covers medical expenses for injuries resulting from an accident. As healthcare costs rise, so does the potential payout for injury claims, which can influence premium calculations.
- Uninsured/Underinsured Motorists: When an accident involves a driver with no insurance or insufficient coverage, insured drivers’ policies (specifically their uninsured/underinsured motorist coverage) often have to pick up the tab. A higher prevalence of uninsured drivers in a state can lead to higher premiums for everyone.
- Insurance Fraud: Fraudulent claims, unfortunately, are a cost that gets spread among all policyholders. Insurers invest in fraud detection, but it remains a persistent issue that contributes to overall costs.
- Litigation Costs: The cost associated with legal expenses and lawsuit settlements related to auto accidents can also be a factor in rate setting.
A Closer Look at the Upcoming Change
For Encompass policyholders in Illinois, this 9.9% increase means that on average, renewal premiums will be higher starting from June 17, 2025. However, the specific change to your individual policy will depend on various factors. These include your driving record, the type of vehicle you insure, your chosen coverages and deductibles, and any discounts you currently receive.
How to Lower Your Car Insurance Costs
News of a rate increase doesn’t mean you’re stuck paying more without options. This is a perfect opportunity to be proactive and look for a better deal. Here are a few strategies Illinois drivers can use:
Act Before the Change: If you’re an Encompass policyholder and your renewal is approaching or after June 17, 2025, be sure to contact your insurer before this date. Inquire about your renewal premium and see if there are any immediate adjustments you can make or discounts you might qualify for that haven’t been applied. Sometimes, a simple review can uncover savings.
Shop Around – It’s Your Superpower: This is perhaps the most effective way to ensure you’re getting a competitive rate. Don’t assume your current insurer is always the cheapest, even if they have been in the past. Use a shopping tool to compare quotes without spending too much time on research.
Review and Adjust Your Coverages:
- Raise Your Deductible: Your deductible is the amount you pay out-of-pocket before your insurance coverage kicks in for a collision or comprehensive claim. Opting for a higher deductible (e.g., increasing from $500 to $1,000) can significantly lower your premium. Just ensure you choose a deductible amount you can comfortably afford if you need to file a claim.
- Evaluate Collision and Comprehensive Coverage on Older Cars: If you drive an older car with a low market value, paying for full collision and comprehensive coverage might not be cost-effective. The potential payout from a claim might not be much more than your deductible, or the cost of the coverage over time could exceed the car’s worth. Consider the 10% rule: if your annual premium for collision and comprehensive is more than 10% of your car’s Blue Book value, it might be time to drop these coverages (assuming you own the car outright and don’t have a loan requiring them).
- Revisit Optional Coverages: Do you need rental reimbursement or towing and labor if you have an auto club membership or new car warranty that already provides these? Eliminating redundant coverages can trim your bill.
Hunt for Discounts – They Add Up! Insurers offer a plethora of discounts. Ask your current insurer and any potential new insurers about any available programs, including bundling, safe driver discounts, good student rates, and defensive driving courses.
- Maintain a Good Credit Score: In Illinois, like many other states, insurers may use a credit-based insurance score as one factor in determining premiums (where allowed by law). Generally, a better credit history can lead to lower insurance costs. Practice good financial habits like paying bills on time and keeping credit card balances low.
Take Control Before Your Renewal Date
While a rate increase from Encompass may be unwelcome news, it serves as a valuable reminder to periodically review your car insurance rates. The insurance landscape is dynamic, and what was the best deal a year or two ago might not be today.
Don’t get caught off guard by another rate increase. Start tracking your policy for free with Auto Quote Tracker, and we’ll send rate change alerts directly to your inbox.
