State Farm Raises Illinois Homeowners Insurance Rates 8%, Its Second Hike in Two Years

State Farm has raised homeowners insurance rates in Illinois by 8% for the second year in a row, a move the company says will add about $10 a month to the average policyholder's bill, according to Kiplinger. The new rates took effect for new policies on Oct. 1, 2026, and existing customers will see the increase as their policies renew starting in December.

State Farm attributes the hike to losses from extreme weather; federal climate researchers note the U.S. averaged three billion-dollar weather disasters a year in the 1980s, a figure that climbed to 27 in 2024. The increase follows a 27.2% rate hike in 2025 that drew criticism from Illinois Gov. JB Pritzker, prompting him to sign a law in August 2026 giving the state insurance department greater authority to review rate increases and requiring insurers to give at least 60 days' notice before renewal increases exceeding 10%, effective July 2027.

Nationally, homeowners insurance premiums rose faster than inflation between 2018 and 2024, according to the National Association of Insurance Commissioners, a trend State Farm's Illinois increase reflects rather than drives alone.