MALVERN, PA — Proposed insurance legislation in Illinois could reduce coverage availability and increase long-term costs for consumers by restricting insurers’ ability to price risk, according to a new report from the Insurance Information Institute as states grapple with rising property and casualty premiums.
The industry group said Illinois Senate Bill 1486 would impose additional regulatory requirements on insurers offering homeowners and auto coverage without addressing broader cost pressures driving premium increases nationwide.
The report argues that severe weather losses, higher repair and rebuilding expenses, fraud, demographic changes, and litigation costs are contributing more directly to rising insurance prices than insurer pricing practices alone.
Illinois has recorded nearly 100 tornadoes this year, more than any other state, according to the report.
“Lawmakers want to help consumers, but proposals like Senate Bill 1486 risk doing the opposite,” Triple-I Chief Executive Officer Sean Kevelighan said in a statement.
The organization warned that limiting risk-based pricing could weaken insurer surplus levels, the capital reserves insurers maintain to pay future claims.
As capital pressure increases, insurers may reduce underwriting exposure or raise rates further, potentially limiting competition and policy availability in higher-risk markets.
The report pointed to Florida as an example of a state where legal system reforms and anti-fraud measures have helped improve insurance affordability, while citing California as an example of ongoing availability pressures tied to longstanding regulatory constraints.
Illinois remains comparatively affordable for homeowners and auto insurance relative to national averages, according to the Insurance Research Council’s affordability index cited in the report.
The Insurance Information Institute also noted Illinois’ economic importance to the property and casualty insurance industry, including its role as headquarters location for several major insurers and brokerage firms.
“Given the importance of the insurance sector to Illinois, policymakers should focus on solutions that strengthen resilience, reduce fraud and address excessive litigation,” Kevelighan said.
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