Illinois home insurance prices jumped 50% in three years — second-highest in the country, study shows

Bridgeport resident Ellen Grimes, 66, is fed up. She has tried finding a more affordable homeowners insurance policy for her two-flat but kept getting rejected by companies that didn’t want to insure her 1880s-era home.“After a year of trying to find a decent rate, I gave up,” Grimes said. Her annual premium this year is $3,246. In 2020, it was $2,423. The extra $823 makes her wonder if it’s worth it.“Do I stay in Chicago? It erodes my desire to stay and renovate my building,” she said. “It drives the middle class people out of the city. It drives middle class people out of the state.”A new study found a typical Illinois single-family homeowner paid almost $1,000 more for home insurance in 2024 compared with three years earlier, a jump of about 50%, making it the second-highest increase in the country.The average cost last year for $350,000 worth of replacement coverage from one of the six major insurers in Illinois was $2,942, up from $1,968 in 2021, according to a nationwide analysis of insurance rate data by the Consumer Federation of America. The nonprofit examined rates for $350,000 replacement value policies for customers with a credit score of about 740.In the Chicago metro area, the cost for that level of coverage increased by 46% over the same three-year period, with average annual costs rising from $1,964 to $2,876, the study found.States like Florida and Louisiana saw higher prices for home insurance, but the rate of increase in Illinois raises concerns about affordability in a state that’s far away from hurricanes and wildfires, the study’s authors said.Utah was No. 1 with premiums rising an average of 59%. Arizona ranked third at 48% followed by Pennsylvania at 44%. But prices are rising all around the country, with increases hitting homeowners in about 95% of U.S. ZIP codes. The study also estimated that American homeowners collectively paid about $21 billion more for home insurance in 2024 than in 2021.States with the highest average annual insurance prices in 2024 were Florida at $9,462 and Louisiana at $6,939 — two states famous for weather disasters.The report said discussions around high insurance costs often focus on states like Florida and California, but the data show premium hikes "have not been limited to coastal states." Wind, hail and tornadoes in the middle part of the country have caused billions in damage, the study found. The Consumer Federation of America is calling for more state oversight of insurance rates, more data transparency and protection for consumers who fear their insurers will drop them. It also recommends prioritizing climate resiliency for homes and infrastructure.The group is also proposing a public reinsurance option to provide a less expensive backstop for insurers who now purchase expensive reinsurance from private firms, often based overseas, and pass that cost to consumers.Douglas Heller, director of insurance for CFA and a co-author of the study, said price increases are pushing some homeowners into cheaper policies with poor coverage or causing them to drop their insurance altogether once their mortgage is paid off.Some cheaper policies consider depreciation when paying claims, so a homeowner whose roof ripped off in a storm may be left with a low payout that doesn’t cover replacement, he said.Legislation in Springfield that was backed by the Illinois Department of Insurance would have given state regulators the ability to review all proposed rate increases of 5% or more for home or car insurance, but the legislation has stalled.Dave Snyder, vice president and counsel at the American Property Casualty Insurance Association, said what’s not mentioned in the study is that insurers in Illinois have had an average underwriting loss of 6.2% over the last decade and had “an astounding” 27.6% underwriting loss in 2023.“Insurance costs have increased across the county in recent years due to rising claims costs associated with inflation, more severe weather, higher rebuilding costs, legal system abuse and regulatory constraints,” Snyder said.But Abe Scarr, director of Illinois PIRG, a nonprofit consumer advocacy organization, said the insurance industry for years ignored the effects of climate change and now wants to drop vulnerable customers.Virtually all mortgage lenders require insurance, so the higher prices make it harder for people who aspire to buying a home, he said.“It’s going to make homeownership more expensive, which means less accessible to a lot of people,” Scarr said.