Illinois homeowners face higher insurance costs amid State Farm’s rate increase.
Homeowners across Illinois will soon feel a sharp increase in their insurance home rates. State Farm, one of the country’s largest insurance providers, has announced it will raise home insurance rates across the state by an average of 27 percent. The changes take effect in August and are already stirring concern among residents, public officials, and consumer advocates.
The company has explained the decision by pointing to financial losses. According to its public statements, State Farm paid out more in claims than it collected in premiums throughout the past year. They reported that for every dollar taken in from homeowners, $1.26 was paid out in return. That gap, combined with rising inflation and damage from severe weather, has created what the company says is an unsustainable financial situation.
Illinois, in particular, saw a spike in claims tied to hailstorms. The state had the second-highest number of hail-related claims in the country in 2024, only behind Texas. That weather damage, according to State Farm, played a major role in the decision to raise prices on homeowners across the state.
At the same time, the company has decided to reduce auto insurance rates for many of its customers. Those with car insurance through State Farm may see a drop in rates by nearly 6 percent on average. For some, the decrease could be as much as 15 percent. While this may be good news for drivers, it’s doing little to ease the tension caused by the spike in home coverage costs.
The rate hike has drawn a sharp response from Illinois Governor JB Pritzker, who called the increase both unfair and unexplained. In a public statement, he criticized the insurance company for using out-of-state losses to justify price jumps in Illinois. He suggested that homeowners in the Midwest are being asked to cover costs tied to properties in riskier places, like beach houses in Florida.
Pritzker went on to say that State Farm is not just raising home rates by increasing premiums but is also raising deductibles and cutting back on what they will pay out for certain claims. This, he argues, adds hundreds of dollars a year in costs for homeowners, without a matching increase in protection.
The governor said he has ordered the state’s Department of Insurance to look into the matter and explore every option available to challenge the changes. He also asked lawmakers to find long-term solutions during the next legislative session that would prevent similar rate spikes from happening again.
The news comes at a time when many residents are still recovering from recent storms and floods. Some communities are still cleaning up from the damage left behind last year. For those already struggling with repairs and costs, the thought of higher insurance bills adds more stress.
There is growing concern among homeowners that insurance may become too expensive for regular families. Consumer groups say that if these kinds of increases continue, more people may choose to go without coverage entirely, leaving them unprotected in future disasters.
State Farm has not responded to those concerns directly. The company stands by its decision and points to financial data as the main driver behind the rate increase.
For now, the debate continues. While drivers may see some relief, homeowners across Illinois are preparing for the reality of bigger bills. And with no guarantee that this is the last rate hike, the pressure is on both the state and the insurance industry to find better ways to balance risk, cost, and fairness.
Sources:
State Farm hiking Illinois homeowners insurance rates by 27% in August
State Farm raising Illinois homeowners’ insurance rates, watchdog group warns
State Farm faces backlash over $523 million insurance rate hike in Illinois
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