New Illinois law would let state insurance department reject excessive rate hikes
A bill working its way through the Illinois legislature could mean good news for homeowners and drivers concerned about insurance rates.
The new law would allow the Illinois Department of Insurance to reject excessive rate hikes for homeowners and drivers. It passed the State House Thursday.
The bill was written in response to State Farm's $523 million, or 27%, homeowners insurance rate hike in the summer of 2025.
State farm said at the time they were raising rates because they had to pay out more for insurance claims than what they are collecting in premiums. Their website said that for every $1 a homeowner paid in 2024, State Farm paid out $1.26 in total costs.
The bill now heads to the Illinois Senate for another vote before it would go to Gov. JB Pritzker's desk.
But not everyone is happy about it. The Illinois Insurance Association said the measure would raise premiums, reduce customer choice and destabilize the market in Illinois.
The group is urging lawmakers to reject the bill, saying Illinois families are already facing an affordability crisis due to inflation and other rising prices.
Illinois Attorney General Kwame Raoul has also sued State Farm, saying they have failed to turn over data for an investigation into its insurance premium increases.
