A bill designed to give the state's Department of Insurance authority to review and approve rates for homeowners' and auto insurance coverage has passed the Illinois House of Representatives. The bill originally began as two separate proposals, but the legislation was combined into Senate Bill 1486, which passed the House on March 19.

Last summer, Governor J.B. Pritzker called for legislation to control insurance costs after State Farm increased homeowners' premiums in the state by an average of 27.2%.

"I am deeply concerned by State Farm's unfair and arbitrary insurance rate hike on Illinois homeowners," Pritzker said in a July 2025 release. "These increases are predicated on catastrophe loss numbers that are entirely inconsistent with the Illinois Department of Insurance's own analysis — indicating that State Farm is shifting out-of-state costs onto the homeowners in our state. Hard-working Illinoisans should not be paying more to protect beach houses in Florida."

State Farm denied the governor's allegations and claimed the rate increases were the result of an unforgiving market where insurers were struggling with severe weather losses and inflationary pressures.

In response to State Farm's premium hike, Pritzker called on the General Assembly to "enact a legislative solution during veto session that prevents insurance companies from taking advantage of consumers through severe and unnecessary rate hikes like those proposed by State Farm."

The initial legislation introduced to address Pritzker's concerns, House Bill 3799, passed the state Senate during an October 2025 veto session, but an amended version failed in the House by four votes. The bill's sponsor filed a motion to concur the day after it failed in the House, which allowed lawmakers the possibility of revisiting the regulations.

SB 1486 was introduced in the current legislative session after negotiations among lawmakers and the governor's office. As amended in the House, it would bar companies from charging excessive, unfair or discriminatory rates for auto and homeowners insurance policies. It would also require insurance carriers to give customers at least 60 days' notice before increasing premiums by 10% or more.

If passed, SB 1486 will also allow the Illinois Department of Insurance authority to review and approve new rate filings beginning in July 2027. If the DOI finds an insurer's proposed rates to be excessive, it could reject the filing and even order the company to give customers rebates for any excessive premiums that have already been collected.

Property and Casualty insurance organizations have spoken out against the legislation. The Illinois Insurance Association, American Property Casualty Insurance Association and National Association of Mutual Insurance Companies released a joint statement on March 20, detailing their concerns. They say the bill is one of the most sweeping and harmful insurance regulatory overhauls in Illinois history.

The statement says, in part: "Illinois families are already facing an affordability crisis with property taxes, gas, grocery, and utility bills all rising. Inflation is squeezing household budgets from every direction. 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. These are added burdens Illinoisans simply cannot afford. We urge Illinois lawmakers to protect the individuals and families who rely on a competitive and stable insurance market by rejecting SB 1486 – Amendment 2."

The statement claims that, if enacted, the bill will likely cause home insurance premiums to increase up to 20%, reduce customer choice as insurers scale back or leave the state, inject politics into rate decisions and destabilize the market, which "has historically been one of the most competitive markets in the nation, offering Illinoisans many options to shop around for a policy that fits their needs and budget."

SB 1486 now awaits Senate approval before being sent to Governor Pritzker.

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