Why Is Car Insurance So Expensive In Illinois?

Car insurance rates are climbing across the country. In Illinois, the average cost for full-coverage car insurance hit $2,000 in 2024, a sharp increase from just a few years ago. However, car insurance in Illinois is relatively affordable compared to the national average, but rates are expected to rise another 7.5% on average nationwide in 2025.

There are many factors contributing to these rising costs, and understanding them can help you make better decisions. With over 20 years of experience in the insurance industry, I can provide additional insight into this topic. Keep reading to learn why car insurance is so costly in Illinois.

Unique Reasons Why Car Insurance In Illinois Is So High

The cost of Illinois car insurance can be attributed to the following reasons as noted below.

High Population Density

Illinois has seen significant growth, with its population surpassing 13 million people. More people on the road increases the likelihood of accidents, which in turn leads to more claims and higher insurance rates.

Rising Healthcare Costs

Healthcare costs in Illinois are rising, with an average yearly increase of 5.3%. Since car insurance companies must cover medical bills in accidents, these higher healthcare costs lead to more expensive claims, pushing up insurance premiums.

Increasing Car Theft

Illinois ranked fifth in the U.S. for the number of car thefts in 2023, according to the National Insurance Crime Bureau (NICB). In 2023, Illinois reported 344.7 motor vehicle thefts per 100,000 people. This resulted in 41,521 vehicles being stolen, marking a 7% increase compared to the previous year.

A higher number of stolen vehicle claims means insurers need to raise rates to cover the cost of these thefts.

Severe Weather and Storm Exposure

Illinois has seen an increase in severe weather events, including storms, heavy winter weather, and droughts. These unpredictable weather patterns lead to more claims for damage, often resulting in costly repairs, which forces insurance companies to raise rates.

Rising Repair Costs

The cost of vehicle repairs has gone up in recent years due to inflation, higher parts prices, and labor costs. In Illinois, the cost of vehicle repairs has risen a significant 23% in the past year. As repairs become more expensive, insurers must raise premiums to cover the increased expenses.

Uninsured Drivers

A significant number (16.3%) of drivers in Illinois are uninsured or underinsured. This increases the risk for insurance companies, as they may have to cover costs for accidents involving uninsured drivers, which leads to higher premiums for everyone.

Factors Causing Your Car Insurance To Be So High

Several factors can impact the cost of your car insurance. Below are some of the most common ones that can affect your premium.

Credit Score

While some states prevent insurance companies from using credit scores to determine premiums, Illinois does not have this restriction. Insurers in Illinois can use your credit score when setting your rates. Drivers with poor credit typically pay about twice as much for insurance as those with excellent credit.

Location

Car insurance companies consider your location when setting your premiums. The average cost of auto insurance can differ from one city to another, and even where you park your car plays a role. Typically, drivers in cities with higher accident and theft rates pay more for insurance than those in rural areas.

Age

Like many other states, Illinois has much higher car insurance rates for young drivers. An 18-year-old in Illinois can expect to pay about three times the state average. However, insurance costs decrease significantly as drivers get older, with people in their 40s to 60s paying much less than younger drivers.

Insurance Company

Insurance companies are key in setting car insurance rates because they assess a variety of factors that help them determine the level of risk associated with insuring you. They review your driving history to see if you’ve had accidents or violations in the past, as well as the type of car you drive, since more expensive or high-performance cars can cost more to repair or replace.

All of this information helps them decide how likely you are to file a claim, and they set your premium accordingly.

Marital Status

Your marital status can impact your car insurance rates. Many insurance companies offer lower premiums for married couples, as they are seen as more stable and less risky. Married drivers may also have more vehicles to insure, allowing them to benefit from multi-vehicle and bundling discounts. Single drivers in Illinois tend to pay slightly higher rates than married drivers.

Vehicle Make & Model

The make and model of your car can have a big impact on your insurance rates. Cars that are more expensive to repair or replace generally cost more to insure. For example, luxury vehicles or sports cars tend to have higher premiums due to their higher value and increased risk of theft or accidents.

On the other hand, older or more common cars may have lower insurance rates because they’re less expensive to repair and replace.

Coverage Level

In Illinois, all car insurance policies must include uninsured motorist coverage for bodily injury. This type of coverage helps protect you if you’re injured in an accident caused by a driver who doesn’t have insurance. While this coverage is important, it can also increase the cost of your premium, as it adds an additional layer of protection to your policy.