Insurance bill combining homeowners and auto regulation passes House,
awaits Senate action
[March 25, 2026]
By Peter Hancock
SPRINGFIELD – A bill that would give the Illinois Department of
Insurance authority to review and approve rates for both homeowners and
automobile coverage is advancing in the General Assembly.
Those two proposals, which started as separate pieces of legislation,
were combined into a single bill that passed the House March 19. The
combined bill now awaits Senate approval before being sent to Gov. JB
Pritzker.
Pritzker initially called for rate review authority over homeowners
insurance last summer after Bloomington-based State Farm Insurance
announced it was raising rates in Illinois an average 27.2%, citing
losses it had incurred from weather-related disasters in the state.
Pritzker, however, questioned that rationale. He and legislative leaders
suggested the company may have been shifting losses from disasters in
other states onto Illinois consumers. He also used the controversy to
highlight the fact that, unlike most other states, Illinois exercises no
control over insurance premiums and has no law prohibiting excessive,
inadequate or unfairly discriminatory rates in the insurance industry.
Separately, Secretary of State Alexi Giannoulias has been pushing for
reforms in the automobile insurance sector, arguing insurance companies
were setting rates based on factors such as a person’s credit rating
that have little or nothing to do with their driving record.
Neither bill made it through the General Assembly in 2025. A bill
regulating homeowners insurance passed the Senate during the fall veto
session in October but failed on the floor of the House just before
lawmakers adjourned.
Product of negotiations
The bill that emerged in the House last week was the product of
continued negotiations among lawmakers and the governor’s office,
although the insurance industry says it still opposes the final product.
Senate Bill 1486, as amended by the House, would prohibit companies from
charging “excessive, inadequate or unfairly discriminatory” rates for
auto and homeowners insurance. And, starting July 1, 2027, it would
require them to give consumers at least 60 days’ notice before raising
premiums 10% or more.
It would also establish a procedure for the Insurance Department to
review and approve new rate filings after July 1, 2027. Although
companies would still be allowed to file new rates and begin collecting
premiums under those terms immediately, the department would have
authority to review those rates.
If the agency finds them to be excessive, inadequate or unfairly
discriminatory, it would notify the company, which could then request an
administrative hearing. If, after the hearing, the agency still finds
the rates excessive, it could reject the rate filing. It would also have
the authority to order the company to rebate customers for any excessive
premiums it collected.
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Mail from State Farm insurance. (Capitol News Illinois file photo)
The bill would also prohibit the practice of “cost-shifting” by
requiring companies to use “credible, state-specific” data in setting
rates whenever such data is available and statistically reliable.
“This legislation is important to home and car owners of Illinois who
are struggling with increasing insurance rates,” Rep. Thaddeus Jones,
D-Calumet City, the bill’s chief House sponsor, said during floor
debate.
Insurance industry concerns
Rep. Jeff Keicher, R-Sycamore, who works as an insurance agent, said the
new bill was an improvement over earlier versions. But he said it does
not address the factors that he said are the real causes of rising
premiums — the rising frequency of catastrophic weather events and the
proliferation of “storm chasers” who exploit those events for their own
profit, at the expense of insurance companies.
“Those storm chasers are driving additional insurance claims and
additional costs,” he said. “We continue to see lawsuits filed for
dubious reasons that continue to drive costs.”
Keicher and a number of other lawmakers who work in the insurance
industry abstained from voting on the bill. It passed 66-40 and will
next be sent to the Senate. It was not immediately clear how quickly the
Senate would take up the bill.
The Illinois Insurance Association, the American Property Casualty
Insurance Association and the National Association of Mutual Insurance
Companies issued a joint statement following the House vote saying the
bill represented “one of the most sweeping and harmful insurance
regulatory overhauls in state history” and that it would end up harming
Illinois consumers.
“Illinois families are already facing an affordability crisis with
property taxes, gas, grocery, and utility bills all rising,” the
organizations said. “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.”
Capitol News Illinois is
a nonprofit, nonpartisan news service that distributes state government
coverage to hundreds of news outlets statewide. It is funded primarily
by the Illinois Press Foundation and the Robert R. McCormick
Foundation.
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