Illinois enacted a new auto insurance law that gives state regulators more oversight of premium increases and creates new consumer protections for drivers. Senate Bill 714 was signed into law Tuesday. It takes effect July 1, 2027.
State Senator Ram Villivalam, a Chicago Democrat, led the measure. He said auto insurance ranks among the most expensive bills consumers pay, yet many residents need a car for work, school, medical appointments and daily errands.
Illinois needs rules that hold auto insurers accountable and prevent unpredictable premium increases from hitting working-class families.
State Senator Ram Villivalam
The average Illinois driver saw an 18% increase in full-coverage auto insurance premiums between 2023 and 2024. The national average increase was estimated at 11.3%, almost 7 percentage points lower.
The law creates a framework for transparency, regulatory review and affordability in Illinois’ auto insurance market. It gives the Illinois Department of Insurance stronger oversight of rate conduct and expands premium-reduction options for residents over age 55.
Under the law, auto insurers cannot raise premiums by more than 10% unless they notify the consumer 30 days before renewal. The measure also bars premiums that are excessive, inadequate or unfairly discriminatory.
The law creates a hearing process through the Department of Insurance when regulators find rates excessive, inadequate or unfairly discriminatory. That process gives the state a formal route to challenge pricing decisions instead of leaving consumers with few options after a renewal notice lands.
The measure also offers relief for older drivers. It allows the Illinois Secretary of State to identify a course that meets or exceeds the National Safety Council Defensive Driving Course standard for four hours of classroom safety instruction. Residents over 55 who complete an approved course become eligible for reduced auto insurance premium costs.
Illinois Secretary of State Alexi Giannoulias said drivers have faced steep insurance rate increases for years with limited oversight and little recourse. He said thousands of Illinoisans shared their stories and pushed for a fairer system.
The law puts consumers first by giving Illinois authority to challenge excessive rate hikes, increase insurance-market transparency and stop drivers from carrying the full cost of unchecked premium increases.
Illinois Secretary of State Alexi Giannoulias
Villivalam said regulating auto insurance rate increases will help keep transportation affordable and accessible while residents deal with higher living costs.
