On August 4, Governor JB Pritzker signed Senate Bill 714 into law, giving the Illinois Department of Insurance authority to review, challenge, and reject auto insurance rate increases for the first time in state history. He also signed a companion measure, House Bill 4273, that applies a similar review process to homeowners insurance.
If you have opened a renewal notice in the last three years and wondered how a policy with no claims, no tickets, and no changes went up by double digits, this is the legislation aimed at that experience.
If you drive in Wilmette, Wicker Park, Lakeview, Elmhurst, Evanston, or elsewhere in the Chicago area, this law will shape your renewals from July 2027. Here is a practical breakdown of what the law does, what it does not do, and what we are advising clients to consider between now and the day it takes effect.
What Illinois SB 714 Actually Does
Senate Bill 714 was a four-year effort led by Illinois Secretary of State Alexi Giannoulias and built on his statewide Driving Change campaign. The core provisions are straightforward:
- The Department of Insurance gains authority to review rate filings. Carriers doing business in Illinois will have to submit proposed rate changes to the state. Regulators will have authority to challenge increases they consider excessive, inadequate, or unfairly discriminatory. If the Department determines consumers were overcharged, it can order rebates.
- Thirty days’ notice is required for auto increases above 10 percent. If your auto renewal is coming in more than 10 percent higher than your expiring premium, your carrier has to notify you 30 days before your renewal date. Under the homeowners bill, the notice period is 60 days.
- Rate filings need supporting data. The law requires credible Illinois loss experience and permits supplemental regional or national data in specified circumstances. Its standards govern how insurers support a rate change; they do not ban every use of non-Illinois data. Read the enacted SB 714 and its official status.
- Defensive driving discounts are expanded. The law builds out a framework for premium discounts tied to a modernized National Safety Council defensive driving course, with expanded access for drivers 55 and older.
Both laws take effect July 1, 2027. That date matters because renewals before then are still governed by the current Illinois framework.
Illinois Was One of Two States Without Rate Review
Before these bills were signed, Illinois and Wyoming were the only two states in the country that did not exercise any regulatory control over insurance rates. Illinois operated under an open competition model, meaning carriers set their prices and the market was expected to sort it out.
In theory, competition disciplines pricing. In practice, Illinois drivers have watched steep car insurance increases land with no real mechanism to ask why.
Recent premium increases have put insurance pricing under closer scrutiny. Repair costs, construction costs, and severe-weather losses all affect rates, but a statewide average does not tell you why your own renewal changed. Compare the renewal’s coverage, deductibles, discounts, and premium with the expiring policy.
Insurance prices also move as carriers change their rates and underwriting. A quote comparison can show whether your current insurer remains competitive for your household.
What the New Law Does Not Do
This is where the fine print matters. The headlines can make the law sound stronger than it is.
- It is not a rate freeze and it is not a rate cap. Nothing in this law prevents your premium from going up. It requires that increases be justified with credible data. A well-supported 12 percent increase is still a 12 percent increase.
- It does not take effect until July 1, 2027. You still have renewals ahead of you under the current rules. Any increase landing before then is governed by the existing framework.
- It did not ban credit-based insurance scores or ZIP code rating. Giannoulias pushed hard on the argument that carriers were pricing policies on factors unrelated to driving records. The final bill does not specifically prohibit those factors. It prohibits rates that are unfairly discriminatory, which leaves the Department of Insurance, and eventually the courts, to define the limits.
- It may not do what everyone expects. Insurance trade groups opposed both bills, arguing that they do not address the underlying cost drivers of repairs, medical care, and litigation. They also warned that added regulatory friction can reduce competition and coverage choices over time. That is a self-interested argument, but it is not baseless. Rate regulation has produced very different outcomes in different states.
What We Are Advising Our Clients to Do
Here is our read as an independent agency that places business with multiple carriers and watches rate movement across the market.
1. Take a Serious Look at Long-Term Rate Stability Products
If premium volatility is the thing that frustrates you, the most direct fix available today is a product designed to reduce that volatility. ERIE Rate Lock is the clearest example in the Illinois market.
ERIE Rate Lock offers more stable pricing on eligible Illinois auto policies. Changes to drivers, vehicles, residence, coverage, and payment arrangements can affect the price. We explain the current terms and compare the total premium before recommending it. See Erie’s auto coverage information.
That is a fundamentally different relationship with your renewal than most drivers have. It is not free, eligibility requirements apply, and it is not automatically the right answer for a household that is about to add a teen driver or move. But for a settled household with stable vehicles and a clean record, it can remove the single most aggravating variable in personal insurance. We are recommending that clients at least price it out.
2. Compare Bundled and Separate Policies
Bundling is worth pricing alongside separate policies. Compare the combined annual cost using the same coverage limits and deductibles.
Multi-policy discounts can make a home, auto, and umbrella package attractive. Another insurer may still offer a better fit for one part of the household, especially a specialty home, vehicle, or rental property.
We compare both arrangements and explain the coverage differences. The new law does not make a bundle automatically better or a separate auto policy automatically more expensive.
An umbrella policy is often the piece people skip. It is usually one of the least expensive coverages in the household and frequently the one that helps open up a stronger account credit, in addition to the liability protection itself.
3. Read the Notice When It Arrives
Starting in July 2027, a notice of an increase above 10 percent should be your cue to call your agent, not your cue to file the letter away and pay the bill. Thirty days is enough time to re-shop the account properly if it makes sense, or to confirm that the increase is in line with the market and stay put.
4. If You Are 55 or Older, Ask About the Defensive Driving Course
The expanded National Safety Council discount is one of the few provisions with a straightforward dollar value. Ask your agent to check what your specific carrier is filing and whether the course is worth completing for your household.
5. Do Not Wait for July 2027
The single most useful thing you can do is have someone review your full account this year. Coverage limits that made sense in 2019 do not necessarily make sense at current construction and vehicle replacement costs. The households that get surprised at renewal are almost always the ones nobody has reviewed in years.
SB 714 May Not Lower Your Premium on Its Own
The new review process begins in July 2027. In the meantime, use your next renewal to check the coverage, compare available pricing, and decide whether a bundle or separate policies work better for your household.
If you would like us to review your account, run a rate stability quote, or price out a home, auto, and umbrella bundle, call 847.242.1040. Longmeadow Insurance works with drivers and homeowners on the North Shore, in the western suburbs, and in city neighborhoods, and reviewing an account costs you nothing.
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