Bills could curb home, car insurance rate increases

Supporters of new bills headed to Governor Pritzker's desk say they could slam the brakes on increases in what you pay to insure your home and car.

State lawmakers gave final approval this week to two measures that would set up the state's first-ever review process for home and car insurance premiums.

"It's a little bit of a historical accident how it happened in the first place," said Abe Scarr from the Illinois Public Interest Research Group (PIRG) of the state's lack of regulation over insurance rates. He added that lobbying from Illinois-based State Farm and Allstate - two of the country's biggest property insurance companies - have helped preserve that status.

But that started to change as insurance rates increased sharply over the last few years.

"Homeowners insurance rates in Illinois increased by 50% between 2021 and 2024," Scarr said. "That was before State Farm filed its half-a-billion-dollar rate increase last July." In addition, the Illinois Secretary of State's office says car insurance premiums went up 18% on average last year.

So driven by concerns about affordability, the Legislature has approved bills allowing the state's Department of Insurance challenge any increases it believes are "excessive," starting in July of next year. Governor J.B. Pritzker has said he will sign those bills when they reach his desk.

The insurance industry has said premiums are being driven higher in Illinois by a number of factors, including increased damage caused by tornadoes and other severe weather events. Kevin Martin from the Illinois Insurance Association says even with those increases, the state has some of the lowest insurance premiums in the country, because it's unregulated.

"Let the competition play out," Martin said. "The market is reflecting the competition."

Martin warned these measures could drive out companies, and drive up costs: "That's what's happened in California, and that's why the rates out there are sky-high."

Scarr dismisses those concerns as "overheated rhetoric," and noted that the proposals are less stringent than California or several other states: "These are the types of protections that exist in every other state."