State Farm is Raising Homeowners Insurance Rates Again. Could Your Premiums Be Next?
Homeowners insurance rates naturally go up over time, but State Farm has just increased homeowners insurance rates in Illinois for the second year in a row. The 8% increase follows a more significant 27.2% State Farm insurance rate hike in 2025 that drew criticism from many.
According to State Farm, the 8% increase will add about $10 per month to the average Illinois homeowner’s insurance bill, though individual increases will vary. The higher rates took effect for new policies on October 1, 2026, and existing policyholders will begin seeing increases when their policies renew starting in December.
State Farm’s rate hike reflects a broader trend of rising homeowners insurance costs nationwide. Even if you’re not affected by the increase in Illinois, you could face higher premiums when your policy renews. Understanding what’s driving these increases can help you prepare for higher costs and identify opportunities to lower your home insurance premium.
Why State Farm is raising homeowners insurance rates again
According to State Farm, the rate increase is driven by losses caused by extreme weather. The University Corporation for Atmospheric Research (UCAR) reports that as the U.S. warms faster than the global average, storms are more likely to form in that warmer environment.
During the 1980s, the U.S. averaged just three billion-dollar weather disasters annually, each causing at least $1 billion in damage. By 2024, that number had climbed to 27, including 17 severe storms involving tornadoes, hail and straight-line winds.
As severe storms become more frequent, insurers pay out more in claims to repair or replace insured property. Rebuilding expenses have also increased, driven up by higher material and labor costs.
Rising homeowners insurance costs aren’t limited to Illinois. Homeowners nationwide are feeling the pressure as premiums continue to climb. According to a report from the National Association of Insurance Commissioners, homeowners insurance premiums rose faster than inflation between 2018 and 2024, putting additional strain on household budgets.
How much more could homeowners pay?
For Illinois homeowners insured by State Farm, an 8% rate increase could add hundreds of dollars to their annual insurance costs, depending on their current premiums. Here’s what that increase could look like at different price points.
|
Current annual premium |
Annual increase |
New annual premium |
|
$1,500 |
$120 |
$1,620 |
|
$2,000 |
$160 |
$2,160 |
|
$2,500 |
$200 |
$2,700 |
|
$3,000 |
$240 |
$3,240 |
Figures are hypothetical and illustrate an 8% premium increase. Actual increases will vary by policyholder.
For homeowners who pay their insurance premiums through a mortgage escrow account, higher insurance costs can also mean higher monthly mortgage payments. Even with a fixed-rate mortgage, your total payment can increase as property taxes and insurance costs rise.
The latest 8% increase follows State Farm’s 27.2% rate hike in 2025, adding to the financial burden for Illinois homeowners who have already seen their insurance costs climb.
With homeowners insurance costs continuing to climb, now is a good time to see whether you’re getting a competitive rate. Comparing quotes from multiple insurers could help you find similar coverage at a lower price.
Use the tool below to explore your options:
What Illinois’ new insurance laws mean for homeowners
State Farm’s 27.2% rate hike in 2025 drew criticism from Illinois Governor JB Pritzker and raised concerns about rising homeowners insurance costs. In August 2026, Pritzker signed House Bill 4273, now Public Act 104-0752, to strengthen oversight of homeowners insurance rates.
The law gives the Illinois Department of Insurance greater authority to review rate increases and requires insurers to provide policyholders with at least 60 days’ notice before renewal premium increases exceeding 10%. The new requirements take effect July 1, 2027.
5 ways to lower your homeowners insurance costs
Though homeowners insurance rates are rising, there are several ways you may be able to bring your premium down.
- Shop around: Shop around for insurance annually before your premium renews. Compare quotes from at least three insurers, and make sure you’re comparing the same coverage limits and deductibles. You might be able to save money by switching home insurance providers.
- Review your coverage: Make sure your coverage is appropriate for your needs, but also verify that you’re not paying for more coverage than you need. Check your dwelling replacement costs, endorsements and coverage limits. If some of your coverage limits are high, you may be able to save money by lowering them — just don’t leave yourself underinsured.
- Consider a higher deductible: Increasing your home insurance deductible can lower your premiums, saving you money every month. A higher deductible comes with additional out-of-pocket risk. Since you’ll need to pay your deductible if you have to file a claim, it’s a good idea to keep a deductible payment accessible, such as in a high-yield savings account, so it’s there if you need it.
- Ask about discounts: You might be able to save money for bundling homeowners and auto insurance policies, installing a security system in your home, investing in storm-resistant home improvements and remaining claims-free. Contact your insurer, make sure you’re receiving the discounts you qualify for and ask about what other discounts are available.
- Review your policy annually: Before automatically renewing your coverage, check your coverage changes and premium increases. Contact your insurer to ask about discounts, changes in coverage and more before you decide to renew.
Higher insurance rates don’t mean you have to overpay
State Farm’s latest rate hike reflects a broader trend of rising homeowners insurance costs nationwide. While insurance is essential for protecting one of your most valuable assets, you don’t have to accept a higher renewal premium without exploring your options.
Start by running a home insurance checkup to make sure your coverage still meets your needs. Then, compare quotes from multiple insurers to see whether you can get a better deal. Don’t focus solely on price. Review coverage limits, exclusions and deductibles to find a policy that offers the right balance of protection and affordability.
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