Supporters and opponents of an OFC both cite Illinois as an example of what the market would look like under an OFC. What is the Illinois market like?
It is good but not perfect.
In most respects, Illinois’s system seems to work. Premiums for both automobile and homeowners’ insurance are a bit below the national average - $610 a year vs. $668 a year for homeowners’ insurance and $761 vs. $821 a year for automobile insurance. Just about everyone gets insurance through the voluntary insurance market - less than 0.1 percent of the population (mostly people with drunk driving convictions) needs to rely on the state-run residual market. Due to the absence of rate regulation, just about every company with any pretense of national operations will sell insurance everywhere in the state. Because Illinois is home to the nation’s two largest writers of property and casualty insurance, however, the market ranks amongst the nation’s most concentrated. Not surprisingly, other companies have a hard time selling in the literal backyard of other companies. The Illinois experience indicates that some degree of market consolidation is likely under an OFC.
