Allstate Homeowners Insurance Rate Increase in Illinois - February 2026

Allstate is set to adjust its homeowners insurance rates in Illinois, impacting around 209,000 policyholders with an average increase of 8.8%. This change, slated for February 24, 2026, was recently submitted to the Illinois Department of Insurance. Earlier in January, Allstate proposed a 14.3% rate increase, reflecting emerging trends in the insurance industry.

The rate hike will range from 4.9% to 10.4%, driven by AI-driven prior authorization delays and escalating repair costs. While insurers must notify state regulators about these adjustments, regulatory compliance requirements offer limited scope for containing costs affecting consumers. Industry professionals note that Illinois’s flexible market environment encourages competitiveness, although this flexibility also raises concerns about the financial strain on households, particularly those with tight mortgage budgets.

Major players like Allstate and State Farm control nearly half of the Illinois market, making these rate changes significant. Recently, State Farm imposed a 27% rate increase, attributing it to post-disaster reconstruction costs, which prompted regulatory inquiries and demands for ZIP code-level data from the Illinois Department of Insurance. Past premium spikes in Illinois underscore a trend of rising costs, with legislative efforts for stricter regulation yet to gain traction.

The variation in rates across states often reflects localized underwriting losses and risks. Illinois's escalations are linked to frequent natural disasters and general inflation affecting repair and rebuilding expenses. As discussions continue regarding regulatory frameworks and industry practices, the need for adaptive risk management and strategic industry oversight remains pivotal for professionals within the insurance sector.