- Illinois will give regulators authority to review, audit and challenge excessive, inadequate or unfairly discriminatory auto insurance rate increases from July 1, 2027.
- Auto insurers must give consumers 30 days’ notice before renewal if premiums rise by more than 10%, while homeowners insurers must give 60 days’ notice for similar increases.
- Supporters say the laws improve affordability and transparency, while insurance groups warn they could reduce competition, limit coverage options and raise costs over time.
Illinois Gov. JB Pritzker signed legislation giving state regulators new authority to review and challenge sharp auto insurance rate increases, ending one of the least regulated auto insurance systems in the US.
The measure, Senate Bill 714, takes effect July 1, 2027. It bars auto insurers from raising premiums by more than 10% without giving customers 30 days’ notice before renewal.
It also blocks out-of-state cost shifting and creates a framework for premium discounts tied to defensive driving courses.
Illinois Secretary of State Alexi Giannoulias championed the auto insurance bill during a four-year push to update state insurance rules. Pritzker signed it days after Giannoulias announced his campaign for Chicago mayor.
Supporters said Illinois had ranked with Wyoming as one of the only states without oversight authority to challenge excessive auto insurance rates.
The new law gives regulators power to review, audit and contest rates they deem excessive, inadequate or unfairly discriminatory.
Pritzker also signed a companion bill covering homeowners insurance. That law requires insurers to give 60 days’ notice when renewal premiums rise by more than 10%. Both measures require home and auto insurers to answer state questions about rate increases and issue refunds when regulators find overcharges.
Pritzker said insurers should prove the need for rate hikes when they tell customers higher prices reflect real costs. He argued Illinois families have faced bills disconnected from conditions on the ground, including this summer’s storm damage and broader pressure on household budgets.
Giannoulias said mandatory auto insurance has become unsustainable for many drivers, forcing choices between coverage and basic expenses.
According to supporters, affordability matters beyond insurance compliance because cars connect residents to jobs, schools and medical appointments.
State Sen. Ram Villivalam said affordability problems hit Black and Brown communities harder. He said broader access to reasonably priced auto coverage affects employment, education and healthcare access.
Illinois Department of Insurance Director Ann Gillespie said the laws require insurers to base rates on Illinois-specific losses and conditions. The department will gain more transparency into improper cost shifting by insurers.
Insurance industry groups opposed the legislation. The Illinois Insurance Association, the American Property Casualty Insurance Association and the National Association of Mutual Insurance Companies warned that residents should expect higher home and auto insurance costs and fewer coverage options.
Brian Christenberry of the National Association of Mutual Insurance Companies said the new system risks making the market less competitive, less affordable and less predictable.
His group represents about 200 insurance carriers. Christenberry said insurance depends on math rather than sentiment, and critics of the law argue the numbers do not support the policy.
Pritzker rejected the argument that stronger rate oversight will raise prices across the board. He said insurers themselves drive rate pressure when they send customers unaffordable bills without a clear link to actual local losses.
Even opponents said any rate increases tied to the new regulatory structure would take several years to appear. The political fight now moves from passage to execution, where regulators, insurers and consumers will test whether the rules restrain pricing without narrowing coverage choices.
