State Farm Raises Illinois Homeowners Insurance Rates by 8%

State Farm is increasing homeowners insurance rates for Illinois customers by an average of 8%, affecting approximately 1.48 million policies. The rate adjustments take effect October 1 for new policyholders and December 1 for renewals. While company actuaries indicated a need for a 12.5% increase, the final filing targets a lower average, though standard homeowners rates will rise by 8.5% and renters rates by 5.8%. Conversely, condominium unitowners will see a 3% reduction.

The company attributes the hike to more frequent and severe weather trends and rising repair costs, noting it paid over $799 million for Illinois storm losses through July 2026. State Farm reported paying $1.22 in claims and expenses for every $1 in premiums collected in Illinois over the last three years. The new pricing models include a 5% surcharge for homes with basic 3-tab asphalt shingles and reduced discounts for aging impact-resistant roofs.

These changes follow significant rate increases in 2024 and 2025, including a previous hike of 27.2%. The move occurs as Illinois prepares for two new laws effective July 1, 2027, which grant the Illinois Department of Insurance the authority to review and challenge insurance rates deemed excessive or discriminatory. Governor JB Pritzker signed this legislation, which State Farm and industry trade groups opposed.