BLOOMINGTON, Ill. (WAND) – Homeowners in Illinois covered by State Farm could see a large insurance rate increase.

The Bloomington-based company revealed in a July 10 statement that the plans for a substantial hike are due to rising home improvement costs and more frequent severe weather events.

“The cost of covering Illinois homeowners’ losses is exceeding the premiums we’re earning—an indication we need to adjust prices,” the company said in the statement.

Inflation was one of the main factors for the hike, as the costs of materials and labor have risen, affecting the costs of repairing or rebuilding homes. 

Governor JB Pritzker issued the following statement in response to State Farm’s decision to increase homeowners’ insurance rates in Illinois: ​  

“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.” 

The company also cited damaging storms like wind, hail and tornadoes on the rise throughout the state as another factor. 

In 2024, Illinois was second in the nation with $638 million in hail damage claims, just behind Texas ($1.1 billion).  

Illinois customers will now be required to have a minimum 1% wind/hail deductible included in their home insurance policy.

Additionally, auto insurance rates in Illinois will decrease an average of 5.7%, with some customers seeing premium reductions up to 15%. 

The rate adjustments will apply to new and existing policies beginning July 18. 

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