Illinois homeowners insured by State Farm are about to see another increase in a major household expense, as the Bloomington-based insurer said non-tenant homeowners will face an average 8% rate increase after it paid out $1.22 in claims and expenses for every $1 in premiums it collected in the Prairie State over the last three years.
Here's what to know
After announcing a 27.2% average hike, the company is again increasing Illinois homeowners' coverage costs, 25 News Now reported. State Farm said the rates were applied Oct. 1 to new policies and would start Dec. 1 for renewals.
On July 1, two Illinois laws will give the state Department of Insurance authority to review and approve homeowners and auto policy rate changes.
"Across Illinois, more customers are experiencing firsthand the effects of severe weather trends that are more frequent and severe — and related repair costs continue to increase," State Farm said in a statement, per 25 News Now.
More background
According to State Farm, Illinois homeowners' premiums reflect projected repair and rebuilding expenses, severe weather, labor, materials, and other conditions specific to the state.
"Insurance rates are future-focused, accounting for the likelihood and expected cost of covered losses," it said, according to 25 News Now.
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The insurer opposed the legislation that is set to place these kinds of rate changes under regulatory review and approval.
What's being done?
The laws will require premium changes for homeowners and automobile policies to be reviewed and approved by the Illinois Department of Insurance.
Before that takes effect, State Farm will continue setting rates under the current system.
"Insurance costs are reviewed regularly because the factors that affect claims can change over time," the company said, as 25 News Now reported, adding that it was making adjustments to stay "financially prepared to pay claims as risks and costs change."
State Farm also stated, "We know insurance is an important part of every family's budget, and we understand that any change in cost matters."
Where can I learn more?
The increase is part of a broader rise in homeowners insurance costs. The articles here look at State Farm rate hikes.
• In Illinois, State Farm's latest rate increase is hitting hundreds of thousands of homeowners.
• In California, State Farm's proposal to increase rates by 30% sparked homeowner backlash.
• Also in the Golden State, regulators approved a 17% hike for State Farm after wildfire losses mounted.
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