Allstate plans to hike Illinois homeowners insurance rates

Allstate customers next year will see their homeowners insurance rate increase by an average of 8.8%, continuing a trend of insurers increasing rates.

The planned increase, contained in a recent filing with the Illinois Department of Insurance, is set to begin Feb. 24, 2026, and will affect more than 209,000 policyholders. The Northbrook-based company had also made a regulatory filing in January to increase homeowners insurance rates in Illinois by 14.3%.

The latest rate increase will range from 4.9% to 10.4%, with a typical homeowner seeing an 8.8% increase when their policy renews.

In Illinois, where insurance is lightly regulated, insurance companies must inform state regulators of planned rate increases, but the state has few tools to rein in costs to consumers."

Allstate is the second‑largest U.S. home insurer because we have accurate, competitive prices and are there for customers when they need us. Illinois rates are being driven by the state's severe weather events and higher repair costs," Allstate said in a statement.

Abe Scarr, director of the nonprofit consumer group Illinois PIRG, said Allstate's planned rate increase is excessive considering the company reported $3.7 billion in profit for the third quarter of this year.

Scarr said he's concerned other insurers will follow suit and raise their rates."State Farm and Allstate have close to half of the market share in Illinois so it's already impacting hundreds of thousands of consumers in Illinois," Scarr said.

Most mortgage loans require homeowners insurance and an increase in rates can harm people who are barely making their monthly mortgage payments, consumer advocates say.

Bloomington-based State Farm, the nation's largest insurer, implemented a in Illinois over the summer. The insurer blamed higher costs for rebuilding and repairing homes after severe weather.

Illinois Department of Insurance Director Ann Gillespie demanded in November 2024 that State Farm produce ZIP code-level data about its policies. Attorney General Kwame Raoul filed a lawsuit in October to compel State Farm to share that data after the insurer refused.

Even before the latest rate increases, Illinois homeowners were already grappling with huge price hikes for insurance. A study by the Consumer Federation of America released in April found a typical Illinois homeowner paid about $1,000 more for coverage in 2024 than they did three years earlier, a jump of about 50% and the second-highest increase in the country. That was based on $350,000 worth of replacement coverage, which the study cited as rising from an average annual price of $1,968 in 2021 to $2,942 in 2024.

Consumer groups have been pushing for more industry regulation in Illinois, including giving regulators the ability to reject excessive rate hikes. Legislation on rate regulation for homeowners insurance passed the Illinois Senate last fall before falling short in the House, but it could come up again in the new year.

The insurance industry has argued that Illinois' light touch with regulation has made the marketplace more competitive. Mark Friedlander, spokesman for the industry-funded Insurance Information Institute, said rates in each state are determined by losses occurring there.

"Illinois homeowners are not paying for losses incurred in California from wildfires or tornadoes in Iowa," Friedlander said. "While calls for rate regulation may appear politically appealing, it is critically important to appreciate that recent increasing home insurance rates in Illinois are a reflection of the risk, rather than the cause. Premium increases reflect real, escalating costs from natural disasters to inflationary pressures to legal system abuse."

Scarr said the industry's claim that weather catastrophes have hurt them financially should prompt the industry to fight against climate change. But it has largely stayed away from advocating for cleaner energy, instead talking about so-called "resiliency" efforts to harden communities against the changing climate.

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