State Farm Raises Illinois Homeowners Insurance Rates 27%

State Farm is raising Illinois homeowners' insurance rates by about 27%, effective July 15 for new policies and August 15 for renewals, impacting nearly 1.5 million policyholders. The insurer cites escalating costs from extreme weather, especially wind, hail, and tornadoes, as well as inflation in building materials and labor as reasons for the increase. Catastrophe losses have exceeded State Farm's catastrophe provisions in 13 of the past 15 years, with Illinois recording the second-highest hail damage claims in the country in 2024. A mandatory minimum 1% wind and hail deductible will also be introduced for all homeowners. Governor JB Pritzker criticized the increase as 'unfair and arbitrary,' alleging that State Farm's loss numbers do not match state data and accusing the company of shifting out-of-state costs onto Illinois residents. There are now growing calls for legislative reforms to give the Illinois Department of Insurance more authority to review and potentially reject significant rate increases.