The Insurance Information Institute (Triple-I) has released an “Issues Brief” warning that proposals to cap or otherwise regulate homeowners’ insurance rates in Illinois could unintentionally reduce coverage affordability and availability. The report underscores that recent premium increases reflect rising risks and costs rather than insurer practices and calls for constructive, long-term solutions instead of price controls.
Background and Key Concerns
Triple-I notes that Illinois policymakers have raised the possibility of legislative intervention in homeowners’ insurance underwriting and price setting. According to Triple-I CEO Sean Kevelighan, while such measures may appear politically appealing, they overlook the underlying factors driving premiums upward. He stressed that premiums are based on actual risk and rising costs, not on arbitrary price hikes.
Illinois currently enjoys homeowners’ insurance rates below the national average, supported by strong market competition. Triple-I cautions that artificially manipulating actuarially sound pricing methods could disrupt this balance and put the state’s insurance market at risk.
Findings from the Issues Brief
Triple-I’s analysis highlights several important facts:
- Affordability and accessibility: Illinois homeowners’ insurance remains more affordable than the U.S. average and is nearly as accessible as Utah, the most affordable state.
- Drivers of higher premiums: Nationally, rising rates reflect long-term trends such as more frequent climate-related disasters, demographic changes, inflationary pressures, and higher labor and material costs that increase rebuilding expenses.
- Risks of legislative fixes: Proposals that restrict insurers’ ability to set rates based on actuarial data could lead to fewer insurers operating in Illinois, ultimately reducing options for residents.
- Constructive alternatives: The report encourages state investment in risk mitigation, improvements to infrastructure, reforms to reduce lawsuit abuse, and adoption of proven strategies from other regions.
Economic Significance of Insurance in Illinois
The property/casualty insurance industry is a key part of Illinois’ economy. In 2021, it contributed an estimated $41.9 billion to the state’s gross domestic product, supported more than 155,000 direct jobs, and helped fund critical public infrastructure through bond investments.
About Triple-I and The Institutes
Founded in 1960, the Insurance Information Institute (Triple-I) provides data-driven insights to educate consumers, industry professionals, policymakers, and the media. Triple-I represents a diverse membership that accounts for nearly half of all U.S. property/casualty premiums written.
Triple-I is affiliated with The Institutes®, a global not-for-profit organization dedicated to advancing risk management and insurance. The Institutes operate through nearly 20 business units, supporting education, research, and solutions to predict and prevent losses worldwide.
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