The Illinois legislature has passed rate-increase regulations for both home and auto insurance, though critics — including the insurance industry — argue the changes fail to address the root cause of rate increases and could backfire by raising costs and reducing options for coverage.
The home and auto insurance bills, which the House and Senate approved as separate measures (SB 714 and HB 4273), require companies to notify customers 30 days prior, for auto, and 60 days, for home, to increase rates by 10%. The bills would allow the Illinois Department of Insurance to stop rate increases that is considers excessive. The bills also allow the department to reimburse customers for the time the rates were in effect if the rates are deemed excessive.
Gov. JB Pritzker, a Democrat who has called out Bloomington-based State Farm publicly over its rate increases, said he intends to sign them.
Democratic state Rep. Sharon Chung, who represents Bloomington-Normal where State Farm and Country Financial are headquartered, voted against both bills. She said amendments to the bills did clarify the language about what is excessive and what information companies needed to submit to the Illinois Department of Insurance, which was one reason insurance companies opposed the bill.
Chung said she is still concerned about retroactive refunds for excessive rates.
Chung said insurance companies are already paying back dividends to customers without state regulations.
“I just want to make sure that we are doing what we can to protect the industries that we do have here in the state,” Chung said.
Industry groups, including the Illinois Insurance Association, said the "bills do nothing to address the factors contributing to higher premiums, such as higher repair costs, more severe weather, and legal system abuse."
“If Senate Bill 714 and House Bill 4273 are signed into law, Illinois residents need to be prepared for the potential impact: higher home and auto insurance costs and fewer options for coverage," the industry groups said in a statement.
Rep. Chung's position
Chung said the auto insurance bill was just copied and pasted from the homeowners' insurance bill. She said she did not have time to discuss solutions to increases in auto insurance. She added auto insurance rates in Illinois are currently below the national average.
“Just based on [homeowners' insurance] that I know, again, I'm fighting for the industries that have been in Bloomington Normal for over 100 years,” Chung said.
Chung said she will also continue to look for other ways to lower rates in Illinois.
“I'll just use this summer and fall to try and figure out if there are things that I can look at in terms of legislation, but I think that time will tell,” Chung said.
Chung said she also wants to get a bill passed that would regulate "storm chasers," which she says are one of the reasons why homeowners insurance is rising. Storm chasers come after natural disasters, taking the opportunity to pressure people who are devastated by a storm into paying for work that is not covered by insurance — or the scammers never return to start the repairs.
Insurance companies
State Farm said it was disappointed with the insurance bills because they do not address the underlying reasons for rate increases.
“As we move forward, our focus remains on our customers. We will work to navigate the new regulatory path and continue serving Illinois homeowners and auto policyholders with the service, coverage, and reliability they expect,” State Farm said in a statement. “This should be a call to action for Illinois. This legislation has not meaningfully tackled key long-term affordability drivers, including storm-chasing fraud, building resiliency, and legal system abuse. We urge lawmakers to address these issues, so reforms deliver real, meaningful relief for consumers.”
State Farm said it remains "committed to our Illinois customers."
Country Financial said it plans to monitor the bill's long-term impacts on insurance affordability and availability.
“Inflation pressures related to auto repair parts, building materials and labor remain a real issue," Country Financial said in a statement.
Support for the bill
Gov. Pritzker said passage of the insurance bills will make the industry more transparent.
“Too many families have dealt with unexplained, unfair insurance price hikes on their homes and cars, so this legislation helps protect consumers while maintaining the core principles the Illinois business community is built on. Addressing affordability has been at the top of the agenda this legislative session, and these bills reflect my shared commitment with the General Assembly to support working families,” Pritzker said in a statement.
Democratic state Rep. Thaddeus Jones, the lead sponsor on both bills who represents a suburb of Chicago, said these bills would support consumers and make Illinois insurance more affordable. Illinois is currently the only state that does not regulate homeowners insurance rates.
“Sometimes change is good when we're talking about consumer protection and affordability to residents,” Jones said. “We want to make sure that the auto industry comes into compliance with the Department of Insurance."
Jones said these bills would not stop competition in, which insurance companies say these bills could increase prices.
How they voted
House
- [R] Jason Bunting - No
- [D] Sharon Chung - No
- [R] Regan Deering - No
- [D] Jehan Gordon-Booth - Yes
- [R] Bill Hauter - No
- [R] Ryan Spain - No
- [R] Dennis Tipsword - No
- [R] Travis Weaver - No
Senate
- [R] Neil Anderson - No
- [R] Li Arellano - No
- [R] Chris Balkema - No
- [D] Dave Koehler - Yes [but did not vote on auto insurance bill]
- [R] Sally Turner - No
