State Farm raising Illinois homeowners insurance rates by 8%

It may not cause the sticker shock of last year’s whopping increase, but State Farm is set to raise homeowners insurance rates in Illinois by another nearly 8% this fall, according to a recent filing with the state.

The increase went into effect for new policies on October 1, while current customers will see the higher rates beginning in December. Bloomington-based State Farm has about 1.49 million homeowners policy holders in Illinois, according to the filing.

State Farm said the rate increase is once again driven by catastrophic losses related to extreme weather events in Illinois.

“Across Illinois, more customers are experiencing firsthand the effects of severe weather trends that are more frequent and severe – and related repair costs continue to increase,” a State Farm spokesperson said in a statement. “To remain financially prepared to pay claims as risks and costs change, State Farm is making rate adjustments.”

The 8% increase will add about $10 per month to the average Illinois homeowners insurance bill, the company told the Tribune Monday. State Farm has paid out $1.22 in claims and expenses for every $1 in premiums collected the past three years in Illinois, the company said.

Last year, State Farm hit Illinois homeowners with a 27.2% rate increase — one of the largest in the state’s history — and also implemented a minimum 1% deductible on all wind and hail losses, raising the out-of-pocket costs for homeowners filing a related damage claim.

The move created a firestorm in Illinois, with everyone from consumer groups to Gov. JB Pritzker challenging the hefty rate increase.

In August, Pritzker signed legislation empowering the Illinois Department of Insurance to review and challenge homeowners rate increases it determines are “excessive, inadequate or unfairly discriminatory.” The legislation also requires insurance companies to gives customers 60 days notice in advance of renewal premium increases above 10%.

Similar legislation was enacted to prohibit excessive auto insurance rate increases, with both new laws set to take effect July 1, 2027.

Meanwhile homeowners across the country continue to pay increased insurance premiums to keep a covered roof over their heads

U.S. home insurance rates rose 46.8% from 2020 to 2025, according to LendingTree’s latest  “State of Home Insurance” report. Colorado had the biggest increase in premiums, more than doubling, while Illinois ranked 7th with a 68% increase over that period, according to the study.

Illinois had the fourth highest increase in home insurance rates last year at 14.1%, the study found.

The average annual cost of home insurance across the U.S. is $2,395. Illinois ranked 17th among the states, with an average annual home insurance cost of $2,731 in 2025, according to the study.

Oklahoma, Nebraska, Colorado, Kansas and Texas are the most expensive states to insure a home, due to greater damage from tornadoes, hail, wildfires and severe storms, according to the study.

While State Farm has been increasing rates in Illinois, the study found it offers the least expensive average home insurance rates nationwide among the major companies surveyed.

rchannick@chicagotribune.com

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