Two plans in Springfield could ban insurers from using external consumer data to set auto rates.

SPRINGFIELD, Ill. (WAND) — Auto insurance rates continue to climb each year, but Illinois lawmakers hope to tackle discrimination in the industry that has left many people paying more than they should. Two plans in Springfield could ban insurers from using external consumer data to set auto rates.

Insurance companies can currently use data from social media and other third party sites to charge higher insurance premiums based on your personal information. Many companies raise or lower their rates depending on the race, religion, gender identity, age, marital status or disability of drivers.

"If the purpose of auto insurance is to protect the 14 million Illinois motorists while they drive, it only makes sense that their actual driving record is used as the primary factor to set their rate," said Secretary of State Alexi Giannoulias (D-Illinois). 

The Secretary of State's office is pushing to end the use of non-driving factors to determine auto premium rates. This plan could also prohibit insurance companies from canceling or refusing to renew an auto policy for licensed drivers when they turn 65. 

"According to the Chicago Sun-Times last year, one consumer group found that in Illinois, 70-year-old drivers pay 12% more than 60-year-old drivers and 75-year-old drivers pay 25% more for a full coverage policy," Giannoulias said.

Policy experts also told the Illinois House Insurance Committee Monday that more insurance companies are also looking at driver credit scores to determine rates.

"So when I'm asked for consumer tops when I talk about this issue, that's often one of the things that I say. Well, you can improve your credit score," said Abe Scarr, Director of Illinois PIRG. "That's not something that is helping lower risk on the roads for that driver or for other drivers. It's time for that to change and to base rates on how your drive, not who you are." 

Sponsors and advocates argue that Illinois also needs a rate review process to ensure auto rates are not excessive, inadequate or discriminatory.

"When you use factors like credit score, like employment history, like home ownership, like zip code, these factors are smuggling in histories of discrimination, decades, centuries and legacies of discrimination," said Rep. Will Guzzardi (D-Chicago).

House Bill 4767 would also require insurance companies to notify the public of any potential rate changes. Customers could have the ability to participate in hearings regarding auto insurance rate hikes if the plan is signed into law. 

Although, the organization representing insurance companies opposes both plans.

"When insurers can properly underwrite based on expected risks, consumers benefit from lower rates, more choices and greater market stability," said Eric Madiar on behalf of the American Property Casualty Insurance Association. "If consumers find that their current rates are too high, they can simply shop with one of the other 280 carriers that we have in this state."

Insurance companies would be required to cooperate with the Illinois Department of Insurance in any discrimination investigations if the plan is passed by the General Assembly and signed by Gov. JB Pritzker.

The Illinois House Insurance Committee plans to continue discussions about both proposals in the coming months. Lawmakers return to Springfield for session next Tuesday. The initial deadline to move substantive bills out of House committees is April 5. Meanwhile, the third reading deadline for the House is April 19.

"It only stands to reason that if we require you to have auto insurance, then you shouldn't have to jump through multiple hoops and face judgment based on a series of criteria that have absolutely no bearing on your ability to drive," Giannoulias said. 

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