Pritzker seeks more regulatory authority over homeowners insurance
business
[July 18, 2025]
By Peter Hancock
SPRINGFIELD — Gov. JB Pritzker is asking state lawmakers for more
authority to regulate the homeowners insurance market in Illinois.
His comments came after the Bloomington-based State Farm Fire and
Casualty Company notified the Illinois Department of Insurance that it
was raising premiums for residential property casualty insurance in
Illinois by an average 27.2%.
In a statement July 10, Pritzker called on lawmakers to pass legislation
in the upcoming fall veto session, “that prevents insurance companies
from taking advantage of consumers through severe and unnecessary rate
hikes like those proposed by State Farm.”
The veto session is scheduled to begin Oct. 14.
“Over the past six years, our state economy has flourished based on
transparent markets and fair competition,” Pritzker said. “State Farm’s
actions are antithetical to the core principles that the Illinois
business community is built on.”
The increase will raise the average cost of a State Farm homeowners’
policy in Illinois to about $2,175 a year, up from $1,700 before the
increase, according to State Farm.
The higher rates took effect July 15 for new policies and will go into
effect Aug. 15 for renewals of existing policies.
Current regulations
Although Pritzker was not specific about what kind of increased
regulatory authority he wants lawmakers to consider, some consumer
advocates have called for giving the state Department of Insurance broad
authority to review, modify or even reject proposed rate hikes.
Under current state law, companies are required to file their rates with
the Department of Insurance, and the agency can review consumer
complaints to determine whether the rates being charged are consistent
with those filings.
The department also has the authority to conduct examinations to
determine whether a company is paying out claims in a timely manner. It
can also conduct examinations into a company’s financial condition and
solvency.
But currently, according to the agency, Illinois is the only state in
the country that does not prohibit rates from being “inadequate,
excessive or unfairly discriminatory,” which means it has no authority
to reject a rate filing on those grounds.
Douglas Heller, director of insurance for the Washington-based Consumer
Federation of America, described Illinois’ law as “among the most
toothless in the nation.”
“Almost every state in the country has a law that says for auto, home
and most other lines of insurance as well, rates cannot be excessive,”
he said in an interview. “Now, it doesn’t mean that the regulators
around the country do a great job or even have the tools to enforce that
very strictly … but Illinois doesn’t even have the language that
prohibits excessive rates for homeowners insurance companies.”
In April, CFA issued a report that said from 2021 to 2024, Illinois
ranked second in the nation for having the greatest increases in
homeowners insurance premiums. Average premiums in Illinois rose 50%
over that period, more than any other state except Utah, where rates
went up 59%.
[to top of second column]
|
State Farm homeowner premiums will rise by roughly 27% in Illinois,
prompting calls for greater regulation. (Capitol News Illinois file
photo)
“At a minimum, Illinois should empower the Department of Insurance to
reject or modify excessive rate hikes, which would represent a basic
consumer protection that residents in almost every other state enjoy,”
Abe Scarr, director of the Illinois Public Interest Research Group, said
in a statement in response to the report.
Even with those increases, though, the report indicated that rates in
Illinois were relatively modest compared to some other states,
particularly those that experience more frequent natural disasters.
Florida, Louisiana and Oklahoma ranked highest in average premiums.
In recent years, lawmakers have given the Department of Insurance
broader authority to regulate premiums in the health insurance market.
Last year, Pritzker signed legislation giving the agency authority to
review and reject proposed rate increases in large-group health
insurance plans. That law also prohibited companies from engaging in
certain “utilization management” practices that steer patients toward
cheaper therapies and medications to lower payouts.to lower payouts.
Also last year, Pritzker named a new director of the agency, former
state Sen. Ann Gillespie, who had served on the Senate Insurance
Committee.
But the agency does not yet have that kind of regulatory authority over
property casualty insurance policies for homeowners, renters and
condominium owners, a fact that consumer advocates say puts Illinois out
of step with the rest of the nation.
Reasons for rate hikes
In his statement, Pritzker accused State Farm of raising rates in
Illinois to cover losses the company has suffered in other high-risk
states like Florida.
“These increases are predicated on catastrophe loss numbers that are
entirely inconsistent with the Illinois Department of Insurance’s own
analysis — indicating that State Farm is shifting out-of-state costs
onto the homeowners of our state,” he said. “Hard-working Illinoisans
should not be paying more to protect beach houses in Florida.”
But State Farm strongly denied that suggestion, saying the increases
were directly related to the cost of weather-related disasters in
Illinois.
“For example, last year in the state of Illinois alone, we paid out more
than $638 million in hail damage claims,” State Farm spokeswoman Gina
Morss-Fischer said in an interview. “That was just in Illinois, and it
was second only to the state of Texas. And this is the kind of thing
that we’ve started to see more frequently.
“And of course, we’re also seeing the increase in replacement costs,
longer waits for replacement materials. And these are all things that
contribute to the need to make this difficult business decision,” she
said.
Capitol News Illinois is
a nonprofit, nonpartisan news service that distributes state government
coverage to hundreds of news outlets statewide. It is funded primarily
by the Illinois Press Foundation and the Robert R. McCormick Foundation. |
