Illinois Mandated Insurance Rate Review After Costs Rose
New legislation requires insurers to justify premium hikes with actuarial data to help stabilize home insurance costs.
Updated on Sept. 28, 2026 in Insurance
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Governor JB Pritzker signed legislation in August 2026 granting the Illinois Department of Insurance authority to review and reject rate increases. This change marks the first time Illinois has implemented prior-approval authority for insurance rates.
Why it matters
The law aims to curb sharp premium hikes after Illinois home insurance costs climbed 68 percent between 2020 and 2026. By requiring insurers to submit actuarial data for review, the state seeks to regulate excessive pricing that has pushed the average premium to approximately $3,559 as of 2025.
Illinois homeowners saw premiums rise 68 percent from 2020 to 2026, reaching an average annual cost of $3,559 in 2025. While State Farm filed for a 27 percent rate increase in 2024, the impact of future filings remains uncertain until the new review process begins.
The players
JB Pritzker
Governor of Illinois who signed legislation granting the state authority to regulate insurance premiums.
Illinois Department of Insurance
The state agency tasked with reviewing and rejecting insurance rate hikes using actuarial data.
State Farm
A major insurance provider that filed for a 27 percent statewide rate increase in Illinois in 2024.
The details
Under the new mandate, insurers must provide justification based on actuarial data before any rate hikes can be implemented. The law institutes a formal notice requirement of 30 days for auto insurance rate adjustments and 60 days for homeowners insurance changes. These measures allow the Department of Insurance to formally evaluate and potentially reject increases that lack sufficient evidence.
Timeline
2020-2026: Illinois home insurance costs rose 68 percent.
August 2026: Governor JB Pritzker signed the rate review legislation.
July 1, 2027: The new insurance rate regulation law takes effect.
Money Landscape
This legislation represents a fundamental shift in Illinois regulatory policy by ending the era of no prior-approval authority for insurance rates. It mirrors the state's focus on consumer protection seen in the Illinois Biometric Information Privacy Act, responding to a multi-year trend of rising costs.
Homeowners should prepare for potential rate changes in the coming months as insurers adjust to the new filing requirements before the law takes full effect in 2027. Reviewing your annual premium statements and speaking with a qualified insurance professional can help you navigate these cost fluctuations.
The takeaway
The new law mandates that insurance companies prove the necessity of future rate hikes through actuarial data. Consider tracking your insurer's rate filings and discussing your coverage options with a qualified professional to understand how these state-level changes may impact your budget.
Further reading
For more information on how regulatory changes affect your coverage, see Insurance.
Source note: This article includes information reported by Live Insurance News.
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