Geico To Hike Illinois Auto Insurance Rates
Dec. 09--Geico, part of Warren Buffett's Berkshire Hathaway, plans to raise its car insurance rates for 192,698 Illinois policyholders next year by an average of 3.5 percent, according to state records.
Those customers currently pay premiums totaling $236 million. The change is effective Feb. 6 for policy renewals.
Geico has been raising premiums nationwide. Over the past year, average premiums per auto policy have increased 6.9 percent, Berkshire Hathaway said in its most recent quarterly report filed with the Securities and Exchange Commission.
Berkshire said that, throughout 2015, Geico saw increases in both the frequency -- how often a loss occurs -- and severity -- the size of a loss -- of claims, prompting it to hike premiums.
Geico couldn't be reached for immediate comment Friday.
State Farm, the nation's biggest auto insurer, said it can't speculate on future rate activity.
But the Bloomington-based company is in the midst of carrying out an overall 5.9 percent average rate increase in Illinois. It was effective Oct. 31.
"Customers with renewals in early 2017 may see a rate change as a result," State Farm spokeswoman Anna Bryant said.
In its quarterly earnings last month, Northbrook-based Allstate said it increased prices on Allstate-brand auto policies by an average of 7.8 percent over the past year.
"Until we know what frequency and severity is in the future, we can't really determine when we'll be changing our pricing," Allstate Chief Executive Tom Wilson told analysts last month. "If frequency and severity keep going up, we'll have to continue to raise our prices."
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