Aug. 11--Geico, which last week reported a significant drop in profits, is raising its car insurance rates in Illinois by an average of 7.7 percent for new policies effective Aug. 14 and for renewals effective Oct. 13.
The change will affect nearly 183,000 policyholders who currently pay a total of $202 million in premiums, according to state records.
Berkshire Hathaway, Geico's parent, said last week that the claims being filed for insurance are becoming both more numerous and costly.
Geico's "loss ratio," which is the ratio of claims-related losses to the premiums earned, was 84 percent and 82 percent in the second quarter and six months, respectively, compared with 76 percent in both comparable 2014 periods.
A ratio over 100 reflects losses.
"As a result, we are implementing premium rate increases as needed," Berkshire Hathaway said in a Securities and Exchange Commission filing last week.
The frequency and severity of claims in the first half of the year increased for all types of coverage, including collision, property damage and bodily injury, and personal injury protection coverage, Berkshire Hathaway said.
byerak@tribpub.com
