Huge Insurance Rate Hike For IL Homeowners Blasted By Pritzker

BLOOMINGTON, IL — Homeowners insurance rates for State Farm policyholders in Illinois will increase 27.2 percent this summer, according to a state filing from the Bloomington-based company.

“Our rate need in this filing is primarily driven by expected catastrophe losses,” the filing said. “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 will go into effect Tuesday for new policyholders and Aug. 15 for renewals. Customers will also be required to have a minimum 1 percent wind and hail deductible as part of their policy.

In a news release on its website, State Farm cited the rising cost of building materials and labor, and the increasing frequency of severe wind, hail and tornadoes in Illinois. Last year, its total cost covering Illinois homeowner losses came out to $1.26 per dollar in premiums collected, according to the company.

Gov. JB Pritzker described the rate hike as “unfair and arbitrary” in a statement Thursday on social media.

“In total, these changes will cost Illinois homeowners hundreds of additional dollars per year without a state-based justification or corresponding increases in protection,” the governor said.

Pritzker said State Farm’s catastrophe loss numbers were inconsistent with those of the state’s insurance department and accused the company of shifting out-of-state costs onto Illinois homeowners.

In its news release, State Farm said Illinois premiums are priced to state-based risk and do not include out-of-state wildfires, earthquakes or hurricanes.

Pritzker said he would direct the insurance department “to take all available regulatory action” and called on the General Assembly to “enact a legislative solution” to prevent “severe unnecessary rate hikes.”