Illinois Gov, JB Pritzker is urging the state’s Department of Insurance and General Assembly to intervene following an approved 27.2% rate increase for State Farm’s homeowners insurance policies in Illinois.
Pritzker described the increase as lacking justification tied to in-state losses and suggested the insurer is shifting out-of-state catastrophe costs onto Illinois policyholders.
“These increases are predicated on catastrophe loss numbers that are entirely inconsistent with the Illinois Department of Insurance’s own analysis – indicating that State Farm is shifting out-of-state costs onto the homeowners in our state. Hard-working Illinoisans should not be paying more to protect beach houses in Florida,” Pritzker said in a report from AM Best.
In response, State Farm has defended the rate hike, pointing to a rise in severe convective storms across Illinois.
“In fact, Illinois had more hail damage claims than any other state except Texas in 2024. Illinois premiums are priced for the risk in this state – not for losses in other states, including wildfires, earthquakes or hurricanes,” the company said.
Supporting this sentiment, State Farm and other carriers have responded to an especially active storm season in the Midwest. In mid-May, wind, hail and tornado activity led to more than 8,800 claims filed with State Farm across Illinois and surrounding states. The pattern of increasing convective storm severity has been a central justification for rate adjustments.
State Farm’s defense of the increase also aligns with its role as the largest US writer of homeowners insurance. As of early 2025, the company maintained a substantial market presence and cited hail as the most frequent cause of damage.
The firm reported that it received more than 47,000 claims tied to weather-related events this year alone.
Last year, State Farm reported paying out over $5 billion in hail claims, with $3.8 billion going to homeowners. Of that total, Texas accounted for $1.1 billion, Illinois for $638 million, and Missouri for $580 million.
As part of its strategy to manage rising claim costs, State Farm is instituting a minimum 1% wind-and-hail deductible on homeowners policies in Illinois. The company stated that the increase in premiums is being driven primarily by projected catastrophe losses in its home state, where it holds a dominant share of the homeowners multiperil market.
Effective mid-July, the 27.2% rate increase will impact approximately 1.49 million policyholders under State Farm Fire and Casualty Co.'s independent homeowners program, adding an estimated $522.8 million in written premiums. The highest individual increase will reach 39.9%, according to the carrier’s regulatory filing.
Pritzker argued that these combined changes – rate increases, new deductibles, and claim caps – will cost policyholders hundreds of dollars each year without a corresponding increase in coverage or in-state risk justification.
He called on regulators to enforce existing law and asked lawmakers to take legislative action during the veto session to prevent similar actions by insurers.
In a separate statement, State Farm said that for every $1 of homeowners premium collected in Illinois last year, it paid out $1.26 in claims. The prior year, the figure was $1.30. The company described the losses as unsustainable.
The insurer also cited broader trends affecting loss severity, including higher labor and material costs, and said the rate changes reflect inflation and general increases in repair expenses. It noted the adjustments are necessary to maintain reliable coverage.
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