Homeowners in Illinois could soon see a large insurance rate increase under a recent filing in the state.
State Farm revealed plans for a substantial rate hike due to what it said was an increase in catastrophic weather events.
“Over the last several years, our catastrophe provision has proven to be inadequate when compared to our actual catastrophe loss experience,” State Farm wrote in its filing. “While there is volatility associated with extreme weather events, our Illinois catastrophe losses have exceeded the year’s catastrophe provision in 13 of the last 15 years, signaling the provision used in rating has been insufficient in recent history.”
The change would mark an increase of 27.2%, the filing shows. When combined with other changes, the statewide premium change for homeowners would be an average of 28.3%. That marks one of the largest increases in Illinois history, according to the Chicago Tribune.
The changes begin for new customers starting July 15 and for renewing policies starting Aug. 15, the filing states.
“Home insurance rates are on the rise in Illinois due to rising home replacement costs and more frequent severe weather events that are driving up the cost and frequency of claims,” State Farm said in a notice on its website. “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.”
It response to the filing, the Illinois Department of Insurance said the changes would cause a “large expected impact to consumers.”
The Bloomington-based insurance company said for every $1 received by policyholders in Illinois in 2024, the company paid out $1.26. In 2023, the number sat at $1.30, a loss rate the company called “unsustainable.”
“The cost of covering Illinois homeowners’ losses is exceeding the premiums we’re earning—an indication we need to adjust prices,” the company said in its statement, adding that inflation has also played a role.
When it came to severe weather, Illinois was among the top 10 U.S. states to report hail damage, with $638 million in claims reported in 2024, behind only Texas, which had $1.1 billion.
The company noted that Illinois prices are based on risks “for this state – not for losses in other states, including wildfires, earthquakes, or hurricanes.”
According to State Farm, the company is also introducing a new “Wind/Hail Deductible” aimed at “limiting rising premiums.”
Illinois customers will be required to have a minimum 1% Wind/Hail deductible as part of their policy, which will apply in cases where losses were caused by wind or hail.
“Choosing a higher deductible is one way to reduce the premium you pay for insurance,” the company said.
The increase is one of many being announced by major insurance companies in Illinois.
In February, Allstate insurance, also based in Illinois, raised its homeowners rates by 14.3% in Illinois, according to the Tribune.
Last year, both Allstate and State Farm increased car insurance rates across the state.
Read More Details
Finally We wish PressBee provided you with enough information of ( Village releases update about future of suburban Northbrook Court mall )
Also on site :
- Google founder claims UN is ‘transparently anti-Semitic’ – WaPo
- Wall Street’s advice after Nvidia hits historic $4 trillion market cap: BUY
- Putin stooges DELIGHT in brazen daylight assassination of Ukrainian spy chief – and all but confirm Vlad was behind hit