Illinois is the last state in the country with no law barring insurance companies from charging excessive, inadequate, or unfairly discriminatory premiums. A bill that would finally change that came within four votes of passing in November. Now it may get a second shot, and a competing compromise proposal has emerged from an unlikely direction.
State Rep. Sharon Chung introduced a new homeowners insurance rate regulation bill on February 24, according to WGLT. Chung, a Democrat who represents parts of Bloomington-Normal where State Farm and Country Financial are headquartered, crafted her bill specifically to address industry objections to the measure Gov. JB Pritzker backed last year. State Farm said it would not oppose the Chung bill, a notable shift for the insurer that spent months fighting the governor’s version.
The timing matters. Allstate implemented an 8.8% average rate increase for about 209,000 Illinois policyholders on February 24, the same day Chung filed. That hike came on top of more than $100 million in Illinois homeowners insurance rate increases Allstate and its subsidiaries enacted throughout 2025, according to the Illinois Public Interest Research Group. State Farm raised premiums in Illinois by an average of 27.2% over the summer. Neither increase required prior regulatory approval.
Illinois is what the insurance industry calls a “use-and-file” state. Companies can set rates and put them into effect immediately, then notify regulators after the fact. Advocates point out that every other state in the country has some mechanism to review whether rates are excessive or discriminatory before they take effect. Illinois does not.
The bill that cleared the Senate last fall and then fell four House votes short would have given the Illinois Department of Insurance authority to approve or reject rate increases. Rep. Robyn Gabel, the bill’s House sponsor, filed a motion to take a second vote on that measure when the 2026 legislative session began in earnest earlier this month, Capitol News Illinois reported.
Chung’s bill takes a different approach. It would allow the Department of Insurance to approve or stop a rate change, but it is explicitly designed as a starting point for negotiation rather than a comprehensive overhaul. The Illinois Insurance Association still opposes the Pritzker-backed Gabel bill, arguing it gives regulators too much unchecked authority. Industry groups indicated more openness to the Chung framework, though specifics of any compromise remain unsettled.
Two competing bills, an industry partially willing to deal, and a governor publicly committed to reform. The legislature is now the variable.
The pressure behind this push is real. Illinois homeowners have absorbed some of the steepest premium increases in the country over the past three years. A Consumer Federation of America report found the average Illinois homeowner paid about $1,000 more for coverage in 2024 than in 2021, a roughly 50% increase and the second-highest jump in the nation. At the national level, S&P Global data showed homeowners’ insurance rates rose an average of 10.4% in 2024, with 34 states seeing double-digit increases.
Insurers attribute the increases to severe weather losses, inflation in construction and repair costs, and elevated reinsurance pricing. State Farm has specifically cited weather-related claims in Illinois as the driver of its rate actions. Pritzker and other officials have alleged some of those increases reflect losses from other states being shifted to Illinois policyholders, a charge the industry firmly denies.
What happens in Springfield matters beyond Illinois. The state’s regulatory fight is playing out against a backdrop of market instability that has reached well beyond the coasts. Nationally, the homeowners insurance market has seen carrier withdrawals in high-risk ZIP codes, growing reliance on state FAIR plans as last-resort insurers, and premium increases that have made coverage unaffordable or inaccessible for some homeowners. Reviewing homeowners insurance quotes from multiple carriers at renewal has become more important precisely because the spread between the best and worst available rates has widened.
Illinois homeowners whose policies are renewing in the next several months should not wait for the legislature to act before shopping. Any regulatory change, if it passes at all, would take time to implement. In the meantime, rates are moving now.
For homeowners in states that already have prior-approval authority, understanding what protections exist in your jurisdiction matters. Some states require insurers to justify rate increases with actuarial data before implementing them. Others have consumer advocates embedded in the regulatory process who can challenge filings. For more on how coverage options and costs compare across carriers, the best homeowners insurance companies vary considerably in price, claims handling, and financial stability.
The Chung bill’s next move depends on whether industry opposition holds or fractures further. State Farm’s willingness not to oppose it shifts the political dynamics. Watch whether the Illinois Insurance Association moves from opposition to neutrality, and whether Gabel and the governor decide to pursue a second House vote on their stronger bill, accept the Chung compromise, or try to negotiate something in between. The legislature is back in session, and a vote on either measure could come on short notice.
