State Farm raising home insurance rates, lowering auto insurance rates in Illinois

BLOOMINGTON, Ill. (WCIA) — State Farm is making some major changes to its insurance rates across Illinois — including hiking up home insurance and bringing down auto insurance rates.

On Thursday, the insurance company announced that throughout the state, they will be decreasing average auto insurance rates and increasing average home insurance rates. More specifically, Illinois home insurance customers with the company will now be required to have a minimum 1% wind/hail deductible as part of their home insurance policy.

This will apply in instances where the cause of loss is deemed to be from wind or hail. All other losses will be subject to the other deductible(s) stated within the policy, as Illinois home insurance customers already chooses deductibles related to loss perils. State Farm said the reason they introduced the wind/hail deductible is to limit rising premiums.

On the other hand, the insurance company will decrease its auto insurance rates by an average of 5.7%, with some of its customers experiencing reductions in premiums of up to 15%. These rate adjustments will apply to new and existing policies starting July 18 and this decision is being driven by the trends that project lower claims costs.

“We understand no one likes to see their insurance rates increase, and we don’t take these decisions lightly,” State Farm said in its news release. “As we continue to adapt to changing conditions, we remain committed to providing you with the best possible value, service, and support.”

The insurance company also said home insurance rates are on the rise across the state due to rising home replacement costs and more frequent sever weather events. State Farm said this is driving up the cost and frequency of claims.

“These changes reflect broader trends in loss patterns and repair costs and are necessary to help ensure we can continue providing reliable coverage to our policyholders,” State Farm said.

In 2024, State Farm said for every $1 in homeowner’s premium they collected from Illinois policyholders, the insurance company paid out $1.26, meaning they paid out more than they collected. In 2023, State Farm was paying out $1.30 for every dollar collected. The company said these losses are “unsustainable.”

Additionally, Illinois was listed with the 2nd most reported hail damage charges in 2024 under State Farm with $638M, only trailing Texas. State Farm also noted that the Illinois premiums are priced for the risks in only its state, meaning not for losses including wildfires, earthquakes and hurricanes which affect other states.

For more information on the insurance rate changes in Illinois, visit statefarm.com.