State Farm is raising Illinois homeowners insurance rates by 8%, and customers already on a policy will see it when they renew on or after December 1. The increase follows a 27% rise in 2025. State Farm told WGLT it has paid out $1.22 in claims and expenses for every $1 in premium it collected in Illinois over the past three years.
Prices for new State Farm policies in Illinois changed on October 1. People who are already insured keep their current rate until their renewal date comes up.
State Farm’s reasons and the numbers
The company’s statement to the public radio station, reported by WGLT and NPR Illinois on October 7, says the increases are needed to keep paying future claims. State Farm pointed to “the effects of severe weather trends that are more frequent and severe” and to rising repair costs. “Homeowners rates reflect current expectations for repair and rebuilding costs, severe weather, labor, materials and other state-specific conditions,” the statement said.
The $1.22 figure is State Farm’s own, and it covers claims and expenses together, not claims alone. A ratio above $1.00 means the company paid out more than it took in over the three years. No individual State Farm spokesperson was named, and the company did not say how many Illinois policyholders are affected. WGLT did not report what the average dollar increase will be.
The 27% increase in 2025 was an average of 27.2% statewide, according to WTTW’s reporting in August. Two increases in a row, 27% and now 8%, compound: a policy that cost $2,000 a year before 2025 would be about $2,540 after the first and about $2,743 after the second. Those dollar amounts are an illustration using the two percentages, not figures from State Farm.
A State Farm homeowner in Illinois has a plain question as the renewal notice approaches. What can be done between now and December 1? The state’s new insurance law offers no help yet, because it does not start until next summer. That leaves the choices in the homeowner’s hands.
A second State Farm increase in two years lands on a household budget at renewal on December 1, right after a 27% rise. The Benefits Checklist covers 11 benefit programs, including property-tax breaks and circuit-breaker credits, with the 2026 income limits for each.
Find the property-tax breaks that offset a State Farm renewal in the Benefits Checklist →
The new Illinois law does not reach this renewal
Gov. JB Pritzker signed two bills on August 4, according to WTTW. House Bill 4273 covers homeowners insurance and Senate Bill 714 covers auto. Both take effect July 1, 2027, seven months after the December 1 renewals.
Until now Illinois was one of two states, with Wyoming, that did not regulate insurance rates before the new laws, WTTW reported. Under HB 4273, the Illinois Department of Insurance can review rates and order rebates of excess premiums if it finds them “excessive, inadequate, or unfairly discriminatory.” Insurers must give 60 days’ notice before raising homeowners premiums by more than 10%. Companies can start charging new rates once they file them, so the law does not require prior approval.
“If you’re telling your customers that rate hikes are necessary, you should be able to prove why,” Pritzker said at the signing. Insurance Director Ann Gillespie said the bills “hold insurance companies accountable for addressing their cost increases.” Industry groups, including the Illinois Insurance Association, said the laws move the state toward “a more rigid rate approval system similar to struggling insurance markets like California.”
Homeowners insurers must use credible Illinois-specific claims data when it is available, and the laws bar companies from shifting out-of-state losses onto Illinois customers. Whether any of that changes the next State Farm filing is not known, since the rules start in 2027.
What Illinois homeowners can do at renewal
The State Farm renewal notice will show the new premium for the next term. Comparing it with quotes from other insurers is the step that can change the number before the first bill at the new rate. A policy with a different insurer can be matched against the current one on the dwelling limit, the deductible and any separate wind or hail deductible.
The Illinois Department of Insurance runs the state’s consumer side. Its Company Lookup page is the starting point for checking an insurer, and its How to File a Complaint page covers complaints about an insurer. The office numbers are (312) 814-2420 in Chicago and (217) 782-4515 in Springfield.
Budgeting for the December 1 renewal
The free route is the Department of Insurance at idoi.illinois.gov, which posts consumer guidance and the complaint process. Its rate, rule and form filings page is where an insurer’s filings are posted, though the department’s site does not say whether that page covers homeowners policies.
A homeowner can write down the renewal date, the current annual premium and the new premium from the notice. The difference is the actual increase for that house, and it may not be 8%, since WGLT reported the percentage and not a per-policy average.
The dates are October 1 for new State Farm policies, December 1 for renewals and July 1, 2027, when the state’s rate review rules begin.
Two State Farm increases, 27% then 8%, in two years
Renewal at State Farm on or after December 1 means paying the second increase in a row, and the household credits that could offset it, such as property-tax breaks, depend on income limits that are easy to misjudge. The Benefits Checklist scans 11 benefit programs retirees most often miss, with the 2026 income limits, a 50-state phone directory and a printable application tracker.
Match the Illinois renewal against property-tax breaks in the Benefits Checklist →
This article was produced with AI assistance and reviewed by The Financial Wire’s editorial team.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
