Springfield, IL (WAND) – Two major insurance reform plans have arrived on the governor’s desk just weeks after tornadoes and other intense storms ripped through central Illinois. Lawmakers hope to protect consumers from unfair rate hikes for homeowner and auto insurance.
You pay for homeowner’s insurance to prepare for the unexpected, but many are now picking up the pieces after June storms.
House Bill 4273 could 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.
“The average Illinois homeowner now pays well over $3,000 annually for coverage,” said Sen. Michael Hastings (D-Frankfort). “Those aren’t just numbers on a page. These are real people in Frankfort, Springfield and Chicago and every community in between, who are forced to choose between paying their insurance premium and covering groceries.”
However, the Illinois Insurance Association told WAND News 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 Illinois Insurance Association Executive Director Kevin Martin.
A separate bill would 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 would be responsible for ensuring rates are fairer.
“Sometimes change is good when we’re talking about consumer protection and affordability to residents,” said Rep. Thaddeus Jones (D-Calumet City). “We want to make sure that the auto industry comes into compliance with the Department of Insurance.”
Yet, the insurance industry said this change could ultimately 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.”
These changes would go into effect July 1, 2027, if Gov. JB Pritzker signs the bills into law.
