Opponents to the bill argued that these provisions would radically change Illinois’ insurance regulatory environment, which could ultimately leave insureds with even higher premiums. (Credit: spirtofamerica/Adobe Stock)
Legislation that would give the Illinois Department of Insurance the authority to regulate homeowners insurance rates in the state failed on the final day of the state’s veto session.
In July, Illinois Governor J.B. Pritzker called for legislation to give the state more control over homeowners insurance rates after State Farm announced it would raise premiums for Illinois homeowners by an average of 27.2%. The insurer attributed this rate hike to the risk of losses from severe weather events, but Pritzker and other state lawmakers argued that this action laid the cost of disasters in other states onto Illinois insureds.
In a July op-ed for the Chicago Tribune, Pritzker said, “As states across the country face even more extreme weather than we do, we need to make sure Illinois homeowners are not paying for losses that companies experience in other states.”
In response to this criticism of rate hikes in the state, State Farm reportedly said the increases were the direct result of losses the insurer incurred in Illinois, though it has been accused of failing to provide proof of that claim.
The bill that was rejected in the most recent session of the Illinois House would have required insurance companies to give customers 60 days notice prior to a premium increase greater than 10%. It would have also required insurers to use Illinois-specific loss data to justify rate increases for customers in the state.
Though the proposal would not have required insurers to acquire prior approval from the state Department of Insurance for rate changes, it would have given the department the authority to review rate changes after they became effective. It would also have established a judicial review process for companies to appeal rate findings they believed were unreasonable.
Opponents to the bill argued that these provisions would radically change Illinois’ insurance regulatory environment, which could ultimately leave insureds with even higher premiums.
The proposal passed the state Senate by a vote of 41-15, but a vote in the House fell four votes short of the 60 required for passage.
The chief sponsor of the bill, Democratic Senator Michael Hastings, said he plans to reintroduce the bill in the 2026 session.
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