State Farm hiking Illinois homeowners insurance rates by 27% in August
State Farm is planning a major rate hike for Illinois home insurance starting in August.
The insurance company is raising its home insurance rates by 27% on average, the company confirmed in an email to CBS News Chicago.
State Farm said the decision to raise rates was made because they are paying out more for insurance claims than they are collecting in insurance premiums. , for every $1 a homeowner paid in 2024, State Farm paid out $1.26 in total costs.
They also said that inflation and increasing severe weather play a role; State Farm said Illinois had more claims for hail damage in 2024 than any other state except Texas.
While homeowner insurance rates are set to rise, auto insurance rates will be dropping for State Farm customers. The company said rates will go down an average of 5.7% with some customers seeing their car insurance premiums reduced by as much as 15%.
Illinois Gov. JB Prtizker responded to the news with disappointment, saying in part in a statement: "I am deeply concerned by State Farm's unfair and arbitrary insurance rate hike on Illinois homeowners. These increases are predicated on catastrophe loss numbers that are entirely inconsistent with the Illinois Department of Insurance's own analysis – indicating that State Farm is shifting out-of-state costs onto the homeowners in our state. Hard-working Illinoisans should not be paying more to protect beach houses in Florida."
The governor said he is directing the Illinois Department of Insurance to "take all available regulatory action to enforce the law and ensure a level playing field," and also calling on the General Assembly to find a legislative solution in the upcoming veto session to prevent insurance companies from "taking advantage of consumers through severe and unnecessary rate hikes."
Full statement from Gov. JB Pritzker
"I am deeply concerned by State Farm's unfair and arbitrary insurance rate hike on Illinois homeowners.
"These increases are predicated on catastrophe loss numbers that are entirely inconsistent with the Illinois Department of Insurance's own analysis – indicating that State Farm is shifting out-of-state costs onto the homeowners in our state. Hard-working Illinoisans should not be paying more to protect beach houses in Florida.
"In addition to increased premiums, State Farm intends to raise out-of-pocket deductibles and reduce payouts for certain claims. In total, these changes will cost Illinois homeowners hundreds of additional dollars per year without a state-based justification or corresponding increases in protection.
"Over the past six years, our state economy has flourished based on transparent markets and fair competition. State Farm's actions are antithetical to the core principles that the Illinois business community is built on.
"Today, I'm directing the Illinois Department of Insurance to take all available regulatory action to enforce the law and ensure a level playing field for Illinois homeowners.
"I also am calling on the General Assembly to enact a legislative solution during veto session that prevents insurance companies from taking advantage of consumers through severe and unnecessary rate hikes like those proposed by State Farm."
