Automobile Insurance Rates in Chicago, Illinois

Abstract

The press recently has devoted some space to automobile insurance rates.' Attention has been focused upon increases in insurance premiums. These have been necessitated by rising automobile repair costs and larger injury settlements awarded by the courts. In order to reduce insurance costs to the consumer, some insurance companies have expanded the variety of deductible coverages from $50 and $100 to $200 and $250. The main purposes of this study were to make an estimation of differences in rates for automobile insurance and to make some comparisons among different types of firms. Secondary purposes were to examine any systematic differences in rates when insurance companies were grouped into different categories and to ascertain whether dealers in one brand of automobile offered insurance charges substantially different from dealers in other brands. Comparisons were to be made with a similar study conducted in 1962. The current study found that there were substantial differences in rates for automobile insurance. Insurance companies quoted rates that were significantly lower than those quoted by insurance brokers and automobile dealers. There were no significant differences in rates when insurance companies were classified by size, method of selling, location of home office or type of ownership. The Chrysler-Plymouth dealers and American Motors dealers contacted did not offer automobile insurance. There were no significant differences in rates quoted by Ford and Chevrolet dealers. The range of automobile insurance rates was greater in 1976 than it was in 1962.