Illinois AG sues State Farm over compliance with state insurance investigation

BLOOMINGTON — The Illinois Attorney General's Office has filed suit against State Farm alleging the insurance giant has refused to comply with regulatory examination into its homeowners insurance policy.

The Illinois Department of Insurance opened an investigation into State Farm's homeowners insurance policies and premiums in November 2024.

As part of its examination, IDOI seeks nationwide data about State Farm's homeowner policies, including the total premiums collected by State Farm, the types of policy coverage and insurance limits and the number of claims against those policies.

Illinois Attorney General Kwame Raoul said in a news release that state insurance departments are the primary regulators of insurance companies so it is crucially important for State Farm to cooperate with the Department of Insurance's oversight of its business practices.

"State Farm's obstruction does not just violate the law," Raoul said in the release. "It prevents the Department of Insurance from obtaining information to help make sure all Illinois homeowners are being treated fairly."

State Farm touts safety, durability initiatives created in TRAIL facility

For alleged violations of the Illinois Insurance Code, Raoul is asking the court to order State Farm to comply with the examination and provide information that will help assess the challenges of the homeowners insurance market.

According to a statement from State Farm, the company maintains it did not violate the law and the lawsuit has nothing to do with Illinois customers or the cost of their insurance.

"State Farm remains committed to collaborating with the Illinois Department of Insurance to benefit Illinois customers," the statement read. "We value our partnerships with state leaders and continue to work together toward finding solutions that allow us to best serve customers and promote a healthy and competitive insurance market."

In July, State Farm announced it would be raising homeowners insurance rates in Illinois by 27.2% in response to catastrophic losses generated by recent extreme weather events. Insufficient premiums to cover claims and the rising cost of repairs were also cited.

The rate hike, which was expected to affect about 1.5 million policyholders, prompted Gov. JB Pritzker to call on state lawmakers to pass legislation in the fall veto session that would give more authority in the regulation of homeowners insurance rates.

After learning of the lawsuit, Sen. Michael Hastings, D-Frankfort, said in a news release that he will be filing legislation to strengthen oversight and improve transparency between consumers and insurers.

"The attorney general's lawsuit against State Farm highlights something we have all been talking about: transparency and fairness," Hastings said in the release. "Homeowners deserve to know why rates are going up and whether they are being treated fairly."