Governor JB Pritzker has renewed his call for legislation that would require insurance companies to justify and disclose the reasons behind significant homeowners’ insurance rate hikes. The proposal, which aims to provide greater oversight of insurance practices, failed to pass the Illinois House last month despite receiving strong support from the state Senate, which is controlled by Democrats.
Pritzker has voiced concern that Illinois’ lack of authority over insurance companies leaves homeowners vulnerable to steep premium increases, citing Bloomington-based State Farm’s decision this summer to raise home insurance rates by over 27%. State Farm attributed the rise to extreme weather and costly repairs.
“We are one of the very few states without limits on what an insurer can charge,” Pritzker remarked at a recent event in Chicago. “A 27% increase in a single year should be reviewed by state regulators, and that’s all we’re asking for. We simply want the insurance companies to show us why it’s justified.”
The bill, which would have empowered the Illinois Department of Insurance to review and challenge “unfairly discriminatory” or excessive rate increases, passed the Senate with a 41-15 vote. However, it fell short in the House, where it was defeated 56-37, missing the necessary votes by just four.
This setback represents a rare defeat for Pritzker in a legislature dominated by his party, despite public support for the measure. In an effort to highlight the issue, the governor co-authored an op-ed in the Chicago Tribune with House Speaker Emanuel “Chris” Welch and Senate President Don Harmon, calling for greater transparency from State Farm.
House leaders had expected the bill to pass, but some Democrats, including State Rep. Thaddeus Jones, head of the House Insurance Committee, expressed concerns over the bill’s focus solely on homeowners’ insurance and not auto insurance rates, which also affect many residents.
During the debate, Jones, who has received significant campaign contributions from insurance interests, argued that the legislation did not address the growing costs of car insurance. He also suggested that the bill should be revisited to include both types of insurance.
The proposed legislation would have required insurers to notify policyholders and the state at least 60 days before imposing premium increases of more than 10%, giving consumers the chance to shop for more affordable coverage.
State Farm, the largest homeowners’ insurer in Illinois, opposed the bill, arguing that it would create an uncompetitive market and drive up overall costs. The company contended that the rate hikes were necessary to cover increasing weather-related losses, including significant payouts in states like California following destructive wildfires.
Despite the setback, Senate President Harmon expressed disappointment that the bill failed to pass the House and hoped that it would be revisited in the spring session.
“I trust the House will make another attempt,” he said. “We had made significant progress, and I thought the bill was in a good position. Each chamber has its own will, but I’m hopeful we can address the issue soon.”
The dispute highlights the ongoing tension between regulators and the insurance industry over the balance between market competitiveness and consumer protection in the face of rising premiums.