State Farm is raising homeowners’ insurance rates in Illinois by an average of 27.2%, following regulatory approval of a filing driven largely by rising catastrophe losses in the state.
The increase takes effect in mid-July and will impact about 1.49 million policyholders, adding $522.8 million in annual written premium.
According to a regulatory filing, the maximum approved rate hike is 39.9%. The change applies to the company’s independent homeowners program, which includes most of its property policies in the state.
“While there is volatility associated with extreme weather events, our Illinois catastrophe losses have exceeded the year’s catastrophe provision in 13 of the last 15 years,” the insurer said in its filing. “Signaling the provision used in rating has been insufficient in recent history.”
The rate filing also includes a new minimum wind/hail deductible of 1%. Other deductibles remain unchanged, according to a Best Wire report.
State Farm first submitted the filing more than a year ago. Illinois regulators requested additional data due to the expected impact on consumers. The company said the change reflects long-term loss trends and is aimed at aligning pricing with projected risks while remaining competitive. The indicated rate need was 32.5%, according to the report.
State Farm also said it uses other tools to manage costs and risk, including internal expense controls, claims process improvements, and investment in loss prevention programs.
The move comes as insurers across the US adjust pricing in response to more frequent and severe weather events, higher rebuilding costs, and reinsurance pressures. Illinois has been among the hardest-hit states. From 2012 to 2022, it posted the fifth-worst median direct combined ratio for homeowners’ and farmowners’ coverage, according to a December 2023 report by AM Best.
