VILLIVALAM LAW SETS GUARDRAILS ON AUTO INSURANCE RATE INCREASES

The following information was released by the Illinois Senate Democrats:

State Senator Ram Villivalam spearheaded a new law that regulates auto insurance premiums in Illinois.

"Auto insurance are one of the most costly bills a consumer can pay but people who rely on their car to get them to work, school and appointments can't simply go without coverage," said Villivalam (D-Chicago). "It's time we hold auto insurers accountable and implement policies that prevent unpredictable premium increases on working-class families."

According to Insurify, the average Illinois driver saw an 18% increase in premiums costs for full-coverage auto insurance between 2023 and 2024, while the national average is estimated to be 11.3% ─ almost 7% lower.

To ensure a fair and affordable auto insurance marketplace for Illinoisans, the law provides transparency and accountability as it relates to premium increases through a clear framework, oversight from the Illinois Department of Insurance and expanded options for residents over age 55 to reduce insurance premium costs.

Specifically, the law prohibits companies from increasing premiums by more than 10% without first notifying the consumer 30 days prior to renewal. It also prohibits auto insurance premiums from being excessive, inadequate or unfairly discriminatory and creates a determination hearing process through the Department of Insurance if it finds rates are excessive, inadequate or unfairly discriminatory.

Additionally, the law secures a path to relief for residents over age 55 by allowing the Illinois Secretary of State to find a course that meets or exceeds the standards of the National Safety Council's Defensive Driving Course's four-hour classroom safety instruction program so residents see reduced premium costs upon completion of the course.

"For years, Illinois drivers have been forced to accept steep insurance rate increases with virtually no oversight and no recourse," Giannoulias said. "Today, that changes and it's because thousands of Illinoisans spoke out, shared their stories and demanded a fairer system. This law puts consumers first by giving Illinois the authority to challenge excessive rate hikes increasing transparency in the insurance marketplace and ensuring drivers are no longer left paying the price."

"By regulating auto insurance rate increases, we are ensuring affordable, accessible transportation options for our neighbors while we combat the increasing cost of living," said Villivalam.

Senate Bill 714 was signed into law Tuesday and takes effect July 1, 2027.