State Farm to raise Illinois homeowners insurance rates by 27.2% in August

As Texas grapples with the massive flooding that struck Hill Country and killed at least 119 people during the July Fourth weekend, many Illinois homeowners will soon see their home insurance rates skyrocket due to the increase in such extreme weather events.

State Farm is raising homeowners insurance rates in Illinois by a whopping 27.2% beginning Aug. 15, according to a filing with the state last month. The rate hike, one of the largest in the state’s history, will affect nearly 1.5 million policyholders. New policyholders will pay the higher rates as of July 15.

In its filing, Bloomington-based State Farm said the rate increase is driven by catastrophic losses related to extreme weather events in Illinois.

“Over the last several years, our catastrophe provision has proven to be inadequate when compared to our actual catastrophe loss experience,” State Farm said in the filing. “While there is volatility associated with extreme weather events, our Illinois catastrophe losses have exceeded the year’s catastrophe provision in 13 of the last 15 years, signaling the provision used in rating has been insufficient in recent history.”

A State Farm spokesperson did not immediately respond to a request for comment Wednesday.

In February, Northbrook-based Allstate raised homeowners insurance rates by 14.3% for nearly 248,000 Illinois customers, as the broader insurance industry struggles to keep up with the increasing frequency of extreme weather events across the country.

State Farm, for example, has received nearly 13,000 claims and paid out more than $4.2 billion to California homeowners who suffered losses during the devastating wildfires that raged across the Los Angeles area in January, according to an update post this week on its website.

In 2024, Allstate raised homeowners insurance rates in Illinois by 12.7%, while State Farm implemented a 12.3% increase.

Homeowners insurance rates have been spiking across the country, increasing 40.4% over the past six years, according to LendingTree’s “State of Home Insurance” report for 2025, published in June. Illinois had the seventh highest increase among states, rising 59.5% between 2019 and 2024, the report found.

The highest cumulative rate increases were in Colorado, Nebraska, Utah, Arizona and Minnesota, according to the LendingTree report.

Illinois ranked 22nd in average annual home insurance costs at $2,743 per year, according to the report. The impending 27.2% rate increase would add about $746 per year to that total for Illinois homeowners who have State Farm insurance.

rchannick@chicagotribune.com

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