Demands for legislative action in homeowners’ insurance underwriting and price-setting would likely reduce both affordability and availability of coverage, according to a new Issues Brief published today by the Insurance Information Institute (Triple-I).

The brief showed that while premiums are rising nationally, Illinois homeowners’ insurance is more affordable than the national average and nearly as accessible as Utah, the most affordable state.

Proposals that limit insurers’ ability to set actuarially sound rates based on risk may shrink market participation, as seen in other states, reducing coverage options for Illinois residents, the data showed.

The report highlights more constructive, long-term solutions focused on mitigation, resilience, and collaboration between policymakers and the insurance industry.

Triple-I suggests the state invest in risk mitigation, supportive infrastructure, and reforms to curb lawsuit abuse, while utilizing strategies that have proven effective in other jurisdictions.

“While calls for rate regulation may appear politically appealing, it is critically important to appreciate that recent increasing insurance rates are a reflection of the risk, rather than the cause,” said Sean Kevelighan, CEO, Triple-I. “Premium increases reflect real, escalating costs, from natural disasters to inflationary pressures to legal system abuse. What’s more, Illinoisans pay less than the national average for insurance, reflecting a relatively healthy marketplace with strong competition. Any attempts to artificially manipulate actuarially proven pricing methods would only put the state’s market in jeopardy, as we are seeing in other states.”

Illinois’ property/casualty insurance sector plays a vital economic role in the Prairie State. In 2021, it contributed an estimated $41.9 billion to the state’s gross domestic product, supported over 155,000 direct jobs, and helped fund critical public infrastructure through bond investments.