CHICAGO, IL — State Farm is raising homeowners insurance rates in Illinois by nearly 8% this fall, adding to the pressure many families are already feeling from rising housing-related costs. The increase took effect for new policies on Oct. 1, and current customers will begin seeing the higher rates in December.
The Bloomington-based insurer said the change reflects the growing cost of claims tied to severe weather. State Farm said more customers are experiencing first-hand the effects of severe weather patterns that are becoming more frequent and more intense, and that repair and replacement costs continue to climb.
In Illinois, the company said it has about 1.49 million homeowners policyholders.
A second major increase follows last year’s sharp jump
The latest increase is smaller than the one Illinois homeowners faced last year, but it still marks another significant rise. State Farm raised rates by 25.5% in Illinois last year, one of the largest increases in the company’s history in the state.
That earlier move also included a minimum 1% deductible on all wind and hail losses, which shifted more of the out-of-pocket risk onto homeowners filing related claims. The new filing continues to reflect the company’s view that home repair and claim costs are not stabilizing.
Even with the latest increase, the company remains one of the dominant players in the Illinois market. Its large customer base means the rate change will affect a wide swath of homeowners across the state.
State Farm points to severe weather and higher repair costs
State Farm said weather losses are a major driver behind the rate adjustment. Across Illinois, the company said customers are seeing the effects of severe weather events that are happening more often and with greater intensity.
Those trends, according to the company, translate into more expensive claims. State Farm said it is still paying out more in claims and expenses for every dollar collected in premiums over the past three years in Illinois.
That imbalance helps explain why insurers have been pushing through higher premiums. The company said its pricing changes are designed to better match what it takes to cover claims and costs.
Illinois lawmakers already moved to limit steep auto increases
The homeowners insurance change comes after a separate year of debate over insurance affordability in Illinois. In August, lawmakers approved legislation giving state regulators more power to review and challenge auto insurance rate increases that they determine are excessive, inadequate or unfairly discriminatory.
The law also requires insurers to give customers 60 days’ notice before renewing policies with premium increases above 10%. Those changes are set to take effect July 1, 2026.
While that measure focused on auto coverage, it reflects a broader concern among Illinois consumers about rising insurance bills. Homeowners, too, are watching premiums climb as insurers respond to weather-related losses and higher rebuilding costs.
Illinois remains one of the priciest places for homeowners coverage
Illinois has been moving up the list of states with the highest homeowners insurance costs. The average annual cost in the state is $3,638, according to LendingTree’s latest “State of Home Insurance” report.
That figure placed Illinois 15th nationally, with an average that is well above the countrywide total of $2,370 in 2024. The state’s ranking has been driven by repeated damage from tornadoes, hail and severe storms.
Among the states surveyed, Colorado had the steepest increase in home insurance premiums over the period studied, more than doubling from 2020 to 2023. Illinois ranked fifth in percentage growth for that same period, with a 66% increase.
For homeowners, the new bills arrive before winter
For many State Farm customers, the higher rates will land just as colder weather and winter maintenance costs are approaching. The timing may be especially noticeable for households already budgeting around mortgages, taxes and utility bills.
The company’s filing does not change the fact that State Farm says it is still trying to keep coverage available while adapting to a more expensive claims environment. In practical terms, the increase means Illinois homeowners will pay more to stay insured, whether they are renewing or buying a new policy.
State Farm’s filing shows how insurance pricing continues to respond to weather risk, repair costs and a strained claims system. For Illinois homeowners, the latest increase is another reminder that the cost of protecting a home is rising along with the cost of rebuilding one.