State Farm Filed for Illinois Rate Increase
The insurer seeks to raise homeowners premiums by an average of 7.9% for over 1.4 million policies in the state.
Updated on Oct. 6, 2026 in Insurance
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State Farm has filed for a 7.9% rate increase on Illinois homeowners insurance policies, a change expected to generate $190.3 million in additional written premium. The adjustment will result in an average cost increase of $128 per year for affected policyholders.
Why it matters
The company states the rate hike is driven by expected catastrophe losses, which now account for 55.2% of the premium for standard homeowners policies. This adjustment follows a period where State Farm paid over $799 million for storm losses in Illinois through July 2026.
State Farm filed for an 8.5% increase on standard homeowners rates and a 5.8% rise for renters, while condo unitowners will receive a 3% reduction. The filing also introduces a 5% surcharge on wind and hail premiums for homes with basic asphalt shingles.
The players
State Farm
This insurance corporation is the largest provider of homeowners insurance in Illinois by premium share.
JB Pritzker
As the Governor of Illinois, he signed legislation in 2026 that grants the Department of Insurance new authority to challenge rate filings.
Illinois Department of Insurance
This state regulatory agency oversees insurance market operations and is responsible for reviewing and challenging proposed rate changes.
The details
The rate change impacts over 1.48 million policies, with new rates applying to new business starting October 1, 2026, and renewals beginning December 1, 2026. The company calculates rates using a Customer Rating Index that utilizes external auto data, public records, and consumer credit information.
Timeline
Oct 1, 2026: New rates apply to new business policies.
Oct 5, 2026: The Department of Insurance marked the filing as Filed.
Dec 1, 2026: New rates take effect for policy renewals.
Market Dynamics
This rate filing occurs under the shadow of new state laws, specifically HB 4273 and SB 714, which empower the Illinois Department of Insurance to challenge insurance rate increases. These regulations represent a shift toward tighter oversight of how insurers account for rising catastrophe losses in their pricing models.
Policyholders in Illinois should prepare for an average annual increase of $128, with higher impacts for those with basic asphalt shingles subject to the new surcharge. Homeowners can check their specific policy details or track the filing status through the state's public insurance portal.
The takeaway
Insurance costs are increasingly reflecting the higher frequency and severity of storm-related catastrophe losses. Homeowners may find rate relief or additional surcharges depending on specific structural features like roofing materials.
Further reading
For more on how state regulations influence policy costs, explore the Illinois Insurance section.
More information
View the filing status and details through the Illinois Department of Insurance public portal.
Source note: This article includes information reported by Insurance Business.
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