State Farm Raises Illinois Home Insurance Rates by 27% Amid Weather-Related Losses

State Farm plans to increase home insurance premiums in Illinois by 27% starting August 15, impacting approximately 1.5 million policyholders. The insurer attributes this rate adjustment to an increase in severe weather events and rising inflation-driven repair costs. Additionally, the company will implement a mandatory one-percent deductible on claims related to wind and hail damage, increasing out-of-pocket expenses for homeowners.

Illinois lacks a state-mandated rate review process for homeowners insurance, which currently allows insurers to raise rates without prior regulatory approval. State Farm reports losses in 13 of the last 15 years, citing significant payouts for weather-related claims, including over $638 million for hail damage in Illinois last year. Governor Pritzker has criticized the rate hike and is advocating legislative changes to introduce rate oversight mechanisms to protect policyholders.