Illinois’s largest home insurer is putting through another rate increase, and its customers are about to feel it. State Farm told NBC 5 Responds that rates for Illinois homeowners are rising an average of 8 percent, effective October 1 on new business and December 1 on renewals. The increase is already in force for anyone buying a new State Farm homeowners policy.
It lands on top of last year’s hike. WGLT reports that the company raised Illinois homeowner rates 27 percent in 2025, so Illinois policyholders face a second large increase in two years.
Who pays the 8 percent and when
The increase applies to homeowners who own and insure the home they live in. State Farm said it does not apply to tenants or renters, who insure only their belongings and liability. Existing customers see the new rate when their policy renews on or after December 1, and the company will mail a letter about the change, which NBC Chicago says should arrive about two months before each renewal date.
For a homeowner with a State Farm policy, the question is concrete: the premium will rise by about 8 percent at the next renewal, and a policy that renews in early December will show it first. The decision is whether to accept the new price or price the same coverage with other insurers before the renewal date.
State Farm, which is based in Bloomington, is the state’s largest homeowners insurer, so the change reaches a large share of Illinois households. Indiana policyholders are not affected this time, because State Farm raised rates there last year, according to the NBC station’s report.
The next date to watch is the renewal letter State Farm says it will mail roughly two months before each policy’s December 1 or later renewal.
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What State Farm filed
The rate filing gives a closer look than the average. According to Insurance Business, the program-wide change is 7.9 percent, below the 12.5 percent the company’s own indication called for. Standard homeowners policies rise 8.5 percent, renters policies 5.8 percent, and condo unit-owner policies fall 3.0 percent. The filing, number SFMA-135045614, is marked filed October 5 and covers 1,483,264 policies, adding $190.3 million in written premium, which works out to roughly $128 per policy. The filing is listed as filed, a use-and-file status, not as an approval, and the 7.9 percent State Farm selected is 4.6 points below the 12.5 percent its own indication called for.
The same report shows how State Farm’s results in the state have shifted. The combined ratio, the share of premium paid out in claims and expenses, was 130.7 percent in 2023, 126.6 percent in 2024 and 109.1 percent in 2025. A ratio above 100 percent means claims and expenses exceeded premium, so 2025 still points to an underwriting loss, though a much narrower one than in 2023.
The reasons the company gives
State Farm points to weather and repair costs. It told NBC Chicago that a busy year of severe weather in Illinois produced millions of dollars in claims, and the station notes a record number of tornadoes and a derecho earlier in the summer. The company said in statements reported by WGLT that it has paid out $1.22 in claims and expenses for every $1 in premium collected over the past three years in Illinois, and that rates reflect expectations for repair, rebuilding, labor and materials.
The company also said that as a mutual company, it serves policyholders on Main Street, not shareholders on Wall Street. Its Illinois page puts the cost in other terms: total costs came to $1.26 for every dollar in premium last year and $1.30 the year before. That page, last updated in August, does not mention the 8 percent increase. The same page says Illinois auto insurance rates were set to decrease an average of 5.7 percent, so the homeowners increase does not mirror State Farm’s auto pricing in the state.
The 2025 hike was reported at 27 percent by WGLT and at 27.2 percent by 25 News Now, which also carried the $1.22 figure.
Comparing homeowners quotes before the December 1 renewal
Illinois now has a state-level check on rate changes. Governor JB Pritzker signed HB 4273 and SB 714 in August, and the governor’s announcement says the Department of Insurance may object to rates that are excessive, inadequate or unfairly discriminatory. The same announcement notes that State Farm had proposed a 27 percent increase to homeowners’ premiums, the backdrop for the new review power. WGLT describes the law as letting the department review and approve rate changes for home and auto policies. Whether that review reaches this filing is not spelled out in the reports.
A homeowner comparing quotes should line up the same dwelling coverage, liability limit and deductible on every quote, since a lower price can come from a higher deductible. The renewal letter will show the new premium, and the current policy’s declarations page shows what the coverage is today. Anyone renewing in December or later has until then to collect competing quotes.
The company-side numbers behind the increase are public: an 8 percent average, 7.9 percent in the filing, and 8.5 percent on standard homeowners policies. The figure that applies to a given household will be on the renewal notice State Farm mails.
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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.
