State Farm Filed for 7.9% Illinois Insurance Rate Hike
Illinois homeowners could see average annual costs rise by $128 as the insurer adjusts premiums for over 1.4 million policies.
Updated on Oct. 6, 2026 in Insurance
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State Farm has filed for a 7.9% rate increase for its Illinois homeowners insurance program, a move that affects 1,483,264 policyholders. The company also introduced a 5% surcharge for homes with specific types of asphalt shingles.
Why it matters
The requested rate hike is driven by high expected catastrophe losses, which now account for 55.2% of the premium for standard homeowners policies. This adjustment follows a period where the insurer paid out more than $799 million for storm losses in Illinois through July 2026.
The filing seeks a 7.9% rate increase, which equates to an average cost increase of approximately $128 per year for the 1,483,264 Illinois policies affected. While standard homeowners rates rise 8.5%, condominium unit owners see a 3% rate reduction.
The players
State Farm
A major insurance provider that holds 33.68% of the Illinois homeowners insurance market share.
Illinois Department of Insurance
The state regulatory agency responsible for overseeing and challenging insurance rate filings.
JB Pritzker
The Governor of Illinois who signed legislation expanding the state's authority to challenge insurance rates.
The details
The rate increase is calculated based on anticipated catastrophe losses, which represent over half of the standard premium costs. Additionally, the insurer is implementing a 5% surcharge on the wind and hail portion of premiums for homes utilizing basic 3-tab asphalt shingles. The pricing model incorporates a Customer Rating Index that utilizes external auto data, public records, and consumer credit information to determine risk exposure.
Timeline
Oct 1, 2026: New rates apply to new business.
Oct 5, 2026: Department of Insurance marked the filing as Filed.
Dec 1, 2026: New rates apply to renewals.
Aug 4, 2026: Gov. Pritzker signed HB 4273 and SB 714.
Money Landscape
This filing occurs as Illinois lawmakers grant the Department of Insurance broader authority to challenge proposed rate hikes. It reflects a broader industry trend where insurers are adjusting premiums to offset elevated catastrophe losses.
Homeowners with State Farm policies should review their renewal notices to see how these adjustments, including the new surcharge for basic 3-tab asphalt shingles, impact their annual budget. If the increase is significant, consider discussing policy coverage and available discounts with a qualified insurance professional.
The takeaway
While base rates are rising, the introduction of specific surcharges for roof types highlights the importance of understanding how your home's construction affects your premiums. Track your renewal notice date and speak with a professional about potential mitigation strategies for your property's specific risk profile.
Further reading
For more information on how regulatory changes affect your coverage, visit Illinois Insurance.
More information
To review the specific filing details, visit the Illinois Department of Insurance public portal.
Source note: This article includes information reported by Insurance Business.
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