Illinois Passes Auto and Home Rate-Review Bills, Pritzker to Sign

The Illinois General Assembly passed two bills on May 27, 2026, handing the state's Department of Insurance new power to review and reject auto and home insurance rates it judges excessive, and Gov. J.B. Pritzker said the same week he will sign both into law. The measures, Senate Bill 714 for auto coverage and House Bill 4273 for homeowners, end a use-and-file pricing system that has let carriers raise Illinois premiums without prior state approval since 1971.

What the New Illinois Insurance Bills Do

Both bills let the Illinois Department of Insurance review rate filings and reject increases that are "excessive, inadequate or unfairly discriminatory," according to Insurance Journal. Insurers can still put a new rate into effect when they file it, but regulators now get a window to challenge it.

For auto policies under SB 714, the department has 40 days from the filing date to notify an insurer that a rate fails the standard. The carrier can then request a hearing, and the rate stays in force until a final order is issued. If the finding survives that hearing, the insurer must rebate the excess premium it collected from drivers.

The package also bars "cost-shifting." Carriers must price Illinois policies on Illinois-specific loss data rather than spreading out-of-state catastrophe costs across local customers. State leaders have accused carriers including State Farm of passing out-of-state losses onto Illinois policyholders, Insurance Journal reported.

Auto vs. Homeowners: How the Two Bills Compare

SB 714 and HB 4273 share the same goal, yet their notice and review timelines differ. Drivers and homeowners face different deadlines, so the side-by-side below sorts out which rule applies to which policy.

Provision	Auto (SB 714)	Homeowners (HB 4273)
Advance notice on a 10%+ renewal increase	30 days	60 days
DOI window to flag a filing	40 days from filing	60 days from filing
Rate standard	Not excessive, inadequate, or unfairly discriminatory	Same standard
Rebate if a rate is ruled excessive	Required after hearing	Required after hearing
Effective date	July 1, 2027	July 1, 2027

Source: Senate Bill 714 and House Bill 4273 as passed by the Illinois General Assembly on May 27, 2026; provisions summarized from Insurance Journal and Troutman Pepper Locke (InsureReinsure) analysis.

What It Means for Illinois Drivers

A 10% renewal increase is not an abstraction for an Illinois household. Bankrate puts the average full-coverage premium in Illinois near $1,900 a year in 2026, so a 10% jump adds roughly $190 annually before the new 30-day warning notice even reaches your mailbox. Compare that with current Illinois car insurance rates and the threshold starts to feel concrete.

Frustration over those increases drove the bill. Illinois full-coverage costs climbed about 18% between 2023 and 2024 according to Bankrate, eased somewhat in 2025, and still sit well above where they stood four years ago. The new law does not cap or cut a single premium, though. It hands regulators a veto over filings they consider excessive and forces earlier disclosure when bills spike.

The Bigger Picture: The End of Open Competition

Illinois has operated an open-competition market since 1971, one of the only states that let insurers set auto and home prices without filing them for approval, the law firm Troutman Pepper Locke noted. SB 714 and HB 4273 retire that approach after more than half a century.

The package caps a year-long push. The Senate first cleared SB 714 in a 42-14 vote on May 15, the House passed it 70-38 on May 27, and lawmakers folded in the companion homeowners bill the same day. Legislators had also floated a separate pricing-factors bill targeting how credit scores and ZIP codes shape premiums.

Insurers fought the measures hard. The National Association of Mutual Insurance Companies argues the framework controls prices without touching the repair, medical, and litigation costs that push them up.

That warning has precedent. California's rate freeze pushed several major carriers to pause writing new policies, leaving drivers with thinner options. Pritzker frames the trade-off differently, casting the bills as overdue consumer protection.

"Too many families have dealt with unexplained, unfair insurance price hikes on their homes and cars, so this legislation helps protect consumers while maintaining core principles the Illinois business community is built on," Pritzker said in a statement.

What You Should Do Now

Looking Ahead

Pritzker still has to sign both bills, which he said he intends to do after the General Assembly sent them his way on May 27. His signature would lock in the July 1, 2027 start date and trigger a long runway for compliance.

Watch the Illinois Department of Insurance next. Regulators must write rules defining what counts as "excessive" or "unfairly discriminatory," and those definitions will decide how aggressively the state actually polices the roughly eight million private passenger vehicles insured across Illinois.

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