SPRINGFIELD, Ill. (WAND) — Gov. JB Pritzker signed two major insurance reform plans into law Tuesday following a historic number of tornadoes and other intense storms in central Illinois. Pritzker and state lawmakers said they want to protect consumers from unfair rate hikes for homeowner and auto insurance.
"Nowadays, some businesses are finding evermore creative ways to extract money from everyday people," Pritzker said. "Companies can dress it up in financial jargon, but Illinois families are all too regularly getting taken advantage of."
State leaders have spent years holding private meetings and public debates on insurance rates, but sponsors finally got both reforms across the finish line in 2026.
House Bill 4273 will ban insurance companies from increasing homeowner insurance premiums by more than 10% without notifying consumers 60 days in advance. It also prohibits home insurance premiums from being excessive, inadequate, or unfairly discriminatory.
"Storms are going to continue to keep hitting Illinois," said Sen. Michael Hastings (D-Frankfort). "But after the winds die down, families should not face unexpected rate hikes with no independent review. Damage from a storm is real, and using every storm as a blank check to raise rates without justification is not."
Yet, the Illinois Insurance Association said this change could cause homeowner insurance premiums to increase up to 20% or $230.
"The more regulatory burdens you put on through legislation, that will do nothing more than increase costs and increase premiums that people are going to have to pay," said former Illinois Insurance Association Executive Director Kevin Martin.
A separate law will ban insurance companies from increasing auto premiums by more than 10% without notifying consumers 30 days before their renewal date. The Illinois Department of Insurance will be responsible for ensuring rates are fairer.
"In one year alone, Illinois drivers were hit with an average 18% increase in auto insurance premiums," said Secretary of State Alexi Giannoulias. "Again, in a single year, even for those with spotless driving records."
However, the insurance industry said this law will harm consumers through higher auto rates and fewer coverage options. They stress Illinois has long benefited from one of the most competitive auto insurance markets in the country.
"We're going to come back here a year from now and we won't be the sixth cheapest," said Sen. Steve McClure (R-Springfield). "We'll be the twentieth cheapest or something even worse. Our constituents can't afford to pay those increases."
Both laws will take effect July 1, 2027.
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