State Farm Raises Illinois Home Insurance Rates 27% Citing Severe Weather Losses

State Farm is set to raise homeowners insurance rates in Illinois by about 27%, impacting nearly 1.5 million customers starting August 15, 2025. The insurer cites 13 years of "unsustainable" financial losses out of the past 15, driven largely by severe weather events like hail and wind, as well as inflation increasing repair costs, with Illinois paying out $1.26 in claims for every $1 collected in premiums last year. State Farm has also introduced a 1% minimum deductible on wind and hail claims for renewal policies. Illinois Governor J.B. Pritzker criticized the increase as "unfair and arbitrary" and has called for legislative action to regulate rate hikes, accusing State Farm of potentially offloading losses from other states, a claim State Farm denies, asserting their rates reflect Illinois-specific risks. The controversy highlights growing concerns over climate change's financial impact on insurance in the Midwest, amid Illinois homeowners' premiums rising nearly 60% from 2019 to 2024, outpacing the national average. The debate continues with calls for more transparency and regulatory oversight in Illinois, which currently does not require pre-approval for major insurance rate increases.