A bill granting the Illinois Department of Insurance authority to review and approve rates for both homeowners and automobile insurance is advancing through the state legislature.
The legislation, which combines two previously separate proposals, passed the House on March 19 and now awaits Senate approval before being sent to Governor JB Pritzker for consideration.
Governor Pritzker first called for rate review authority over homeowners insurance last summer after State Farm Insurance, based in Bloomington, announced an average rate increase of 27.2% for Illinois policyholders. The company cited losses from weather-related disasters as the reason for the hike. Pritzker questioned the justification, suggesting that the insurer might have been shifting losses from other states onto Illinois consumers. He also highlighted that Illinois is one of the few states without laws limiting excessive, inadequate, or unfairly discriminatory insurance rates.
Meanwhile, Secretary of State Alexi Giannoulias has advocated for reforms in the auto insurance market, arguing that insurers rely on factors such as credit scores rather than driving records to determine premiums.
Previous attempts to pass similar legislation stalled in 2025. A homeowners insurance bill passed the Senate during the fall veto session but failed on the House floor just before lawmakers adjourned.
Key Provisions of the Bill
The merged legislation, Senate Bill 1486 as amended by the House, aims to curb unfair pricing practices in both the homeowners and auto insurance markets. Key provisions include:
- Prohibiting insurers from charging “excessive, inadequate or unfairly discriminatory” rates.
- Requiring companies to provide at least 60 days’ notice before increasing premiums by 10% or more, effective July 1, 2027.
- Allowing the Illinois Department of Insurance to review and approve new rate filings starting July 1, 2027. Companies may begin collecting premiums immediately but could face rejection if the department finds rates to be unfair or excessive after an administrative hearing.
- Mandating the use of “credible, state-specific” data when setting rates, effectively banning the practice of “cost-shifting.”
“This legislation is important to home and car owners of Illinois who are struggling with increasing insurance rates,” said Rep. Thaddeus Jones, D-Calumet City, the bill’s chief House sponsor.
Industry Concerns and Opposition
Some lawmakers with experience in the insurance industry expressed reservations. Rep. Jeff Keicher, R-Sycamore, said the bill improved on earlier versions but does not address key drivers of rising premiums, such as the increasing frequency of catastrophic weather events and opportunistic claims filed by “storm chasers.” Keicher and several colleagues abstained from voting.
The bill passed the House 66-40. The timeline for Senate consideration is not yet clear.
Major industry groups, including the Illinois Insurance Association, the American Property Casualty Insurance Association, and the National Association of Mutual Insurance Companies, criticized the legislation in a joint statement. They described it as “one of the most sweeping and harmful insurance regulatory overhauls in state history” and warned it could ultimately raise costs for Illinois consumers.
“Illinois families are already facing an affordability crisis with property taxes, gas, grocery, and utility bills all rising,” the statement said. “At a moment when lawmakers should be laser-focused on affordability, the General Assembly is instead advancing radical legislation that would make both auto and homeowners’ insurance more expensive for nearly every Illinois household.”
