BLOOMINGTON, Ill. (25News Now) – State Farm is raising rates for customers by an average 8% for Illinois homeowners’ insurance coverage, citing rising costs associated with “more frequent and severe” weather trends.
The increases take effect Oct. 1 for new policyholders, and Dec. 1 for renewals.
The rate hike comes before two new laws take effect July 1, 2027, giving the Illinois Department of Insurance authority to review and approve rate changes for homeowners and automobile policies.
State Farm opposed the legislation that came a little more than a year after the Bloomington-based company announced it was raising homeowners’ insurance rates by an average 27.2%.
In a statement released to 25News Monday night, State Farm pointed to increasing weather events that damaged homes across the state, causing the insurer to pay out $1.22 in claims for every $1 in premiums collected for the past three years.
The following is the company’s entire statement:
“Insurance rates are future-focused, accounting for the likelihood and expected cost of covered losses. Across Illinois, more customers are experiencing firsthand the effects of severe weather trends that are more frequent and severe – and related repair costs continue to increase. To remain financially prepared to pay claims as risks and costs change, State Farm is making rate adjustments. (State Farm has paid out $1.22 in claims and expenses for every $1 in premiums collected the past three years in Illinois.)
Insurance costs are reviewed regularly because the factors that affect claims can change over time. Homeowners rates reflect current expectations for repair and rebuilding costs, severe weather, labor, materials, and other state-specific conditions. A prior decrease or improvement in one area does not determine the current expected cost of homeowners claims in Illinois.
As the risk – and loss costs – increase, so do rates for protection. Effective Oct. 1 on new business and Dec. 1 on renewals, non-tenant homeowner’s rates for Illinois customers are increasing an average of 8%.
We know insurance is an important part of every family’s budget, and we understand that any change in cost matters. As a mutual company, State Farm serves policyholders on Main Street, not shareholders on Wall Street. We must focus on long-term financial strength to meet the needs of customers now and in the future.”
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