Insurance Groups Warn: Illinois SB 1486 - Amendment 2 is Likely to Increase Home & Auto Costs for Illinoisans and Destabilize the Insurance Market

The Illinois Insurance Association (IIA), the American Property Casualty Insurance Association (APCIA), and the National Association of Mutual Insurance Companies (NAMIC) today issued the following joint press release opposing Illinois Senate Bill 1486 - Amendment 2 after its advancement through the House Executive Committee and then passage in the House of Representatives. The groups warn that the bill represents one of the most sweeping and harmful insurance regulatory overhauls in state history - one that will likely raise premiums, reduce consumer choice, and destabilize Illinois' insurance market.

"Illinois families are already facing an affordability crisis with property taxes, gas, grocery, and utility bills all rising. Inflation is squeezing household budgets from every direction. At a moment when lawmakers should be laser-focused on affordability, the General Assembly is instead advancing radical legislation that would make both auto and homeowners' insurance more expensive for nearly every Illinois household. These are added burdens Illinoisans simply cannot afford. We urge Illinois lawmakers to protect the individuals and families who rely on a competitive and stable insurance market by rejecting SB 1486 - Amendment 2."

Key Concerns

If enacted, SB 1486 Amendment 2 is likely to:

• Cause homeowners insurance premiums to increase up to 20% or $230 on average. Auto insurance premiums are also likely to increase.
• Reduce consumer choice as insurers scale back or leave the state.
• Inject politics into rate decisions, slowing filings and delaying needed adjustments.
• Destabilize a market that has historically been one of the most competitive markets in the nation, offering Illinoisans many options to shop around for a policy that fits their needs and budget.

This legislation ignores facts, such as:

• Homeowners' insurance losses have risen sharply, driven by inflation in construction materials and labor, more frequent severe weather, population growth in high-risk areas, and legal system abuse.
• Illinois homeowners' insurers experienced an 8.3% underwriting loss over the last decade and a 30.3% loss in 2023 alone.
• Private passenger auto insurers in Illinois have averaged a 2.7 percent underwriting loss over the last decade. Despite these challenges, auto insurance rates in Illinois are 18 percent below the national average.
• Auto insurance premiums, which had been rising nationwide, are now trending downward in Illinois, thanks to fewer crashes and fewer claims.