Quick answer: State Farm is raising Illinois homeowners rates an average of 8%, effective October 1, 2026 for new policies and December 1, 2026 for renewals. Your own change may be smaller or larger. Don't cancel anything yet: read the renewal declarations page, get independent quotes for identical coverage at least 30 days before renewal, and switch only with matched effective dates. If no one beats State Farm on equal coverage, renewing is a sound decision.
If you insure your Illinois home with State Farm, a renewal letter is coming in November or December with a higher number on it. On October 6, 2026, KFVS reported that State Farm is implementing an 8% average rate increase on Illinois homeowners insurance, citing more frequent and severe weather and rising repair costs.
This is not a reason to panic, and not automatically a reason to leave. It is a reason to spend an hour over the next few weeks making sure you are paying a fair price for the coverage you actually have. Here is what was announced, why your bill may not move exactly 8%, how the new Illinois law fits in, and a step-by-step plan.
What Did State Farm Announce for Illinois Homeowners?
According to the KFVS report, the key facts are:
- Size: an 8% average increase on Illinois homeowners insurance.
- New policies: the new rates apply to policies written on or after October 1, 2026.
- Renewals: the new rates apply to renewals on or after December 1, 2026.
- Stated reason: weather trends that are "more frequent and severe," plus rising repair costs across the state.
- State Farm's loss figure: the company says it has paid out "$1.22 in claims and expenses for every $1 in premiums collected the past three years in Illinois."
State Farm also told KFVS that "insurance rates are future-focused, accounting for the likelihood and expected cost of covered losses," and that its homeowners rates reflect expectations about repair costs, severe weather, labor, and materials.
This increase follows a much larger one. A little more than a year earlier, State Farm announced a 27.2% average homeowners rate increase across Illinois, as reported by Capitol News Illinois. That 2025 increase is a big part of why the Illinois General Assembly passed the rate-review legislation discussed below.
Why Is State Farm Raising Rates Again?
It is fair to let State Farm make its own case. On its "Understanding the issues in Illinois" newsroom page, the company lays out the numbers it says are driving Illinois homeowners rates:
- State Farm says it handled more than 96,000 catastrophe weather-related home and auto claims in Illinois in 2026, with home catastrophe claims running 50% above its 10-year average.
- It says it has paid more than $799 million for storm-related losses in Illinois this year, and $457 million in Illinois hail claims in 2025 alone.
- It says Illinois recorded more than 120 confirmed tornadoes in each of the past three years and, as of August 19, 2026, had surpassed 200 confirmed tornadoes this year.
- On the money side, it says covering Illinois homeowners' losses cost "$1.26 for every dollar in premium we collected" last year, and $1.30 the year before.
In fairness, the weather problem is not unique to State Farm. Every carrier writing homes in Illinois is paying the same hail and wind claims; we covered the pattern in how Illinois weather affects home insurance. And not every State Farm rate move has been an increase: the same page notes its Illinois auto rates fell 5.7% effective July 18, 2025.
So an 8% increase, on its own, is not evidence of anything improper. The question for you is narrower: is State Farm's new price for your house competitive with what other carriers would charge for the same coverage? Only a comparison answers that.
Does "Average 8%" Mean My Premium Goes Up 8%?
Almost certainly not exactly. A statewide average blends thousands of individual rate changes, and a rate revision usually also re-weights individual factors, so two neighbors with the same carrier can get very different renewal letters. The main things that move your number:
| Factor | Why It Moves Your Number | What to Check on Your Renewal |
|---|---|---|
| Roof age and material | Hail and wind are the losses State Farm cites; older roofs are damaged more often and more likely paid at depreciated value | Confirm the roof year on file is correct; see ACV vs. replacement cost on roofs |
| Dwelling coverage amount | Most policies raise the dwelling limit each year to track rebuilding costs, so part of your increase is buying more coverage | Compare the Coverage A limit to last year's; make sure it tracks a realistic rebuild cost, not an inflated one |
| Wind/hail deductible | State Farm's newsroom page says Illinois customers will now be required to carry a minimum 1% wind/hail deductible | Find the wind/hail deductible line and do the math: 1% of a $400,000 dwelling limit is $4,000 per claim |
| ZIP code and territory | Carriers price by territory based on local loss history; hail-heavy areas tend to see larger changes | Ask your agent whether your territory moved more or less than the state average |
| Claims history | Recent claims, especially weather claims, often add surcharges or remove claim-free discounts | Check that any closed-with-no-payment claims are not being counted against you |
| Discounts | Bundling, paid-in-full, protective-device, and new-roof credits can fall off quietly | Compare the discount list on both declarations pages line by line |
The takeaway: judge your renewal by the dollars on your declarations page and what the same coverage costs elsewhere, not by the headline percentage.
Will the New Illinois Rate-Review Law Stop This Increase?
No, not this one. Here is the timeline so you know what to expect.
In late May 2026, the Illinois General Assembly passed two bills: House Bill 4273 for homeowners insurance and Senate Bill 714 for auto insurance, both sponsored in the House by Rep. Thaddeus Jones, according to Capitol News Illinois. Gov. JB Pritzker signed them in August 2026, as reported by the Sentinel. The laws take effect July 1, 2027.
Once in effect, the homeowners law:
- Prohibits rates that are "excessive, inadequate, or unfairly discriminatory."
- Gives the Illinois Department of Insurance authority to review homeowners rate filings and, if a filing fails the standards, reject it and order the company to rebate excess premium it collected.
- Requires at least 60 days' notice before a premium increase of more than 10%.
- Requires insurers to use Illinois-specific claims data when it is available, and bars shifting out-of-state disaster losses onto Illinois customers.
Two caveats. Companies can still start charging a filed rate once it is on file; the review and any rebate come afterward. And none of this applies to renewal notices dated before July 1, 2027, so a December 2026 renewal is governed by today's rules. An 8% increase is also under the new law's 10% notice threshold.
State Farm and the insurance industry opposed the legislation, arguing it could reduce competition and ultimately raise costs. For your December renewal, the law changes nothing, and your tool is the one it has always been: comparison.
What Should I Do Before My December 1 Renewal? A Step-by-Step Plan
Step 1: Read the renewal declarations page, not just the bill
Your renewal packet includes a declarations page listing every coverage, limit, deductible, discount, and the premium. Put it next to last year's and look for what actually changed. Our plain-English guide to the declarations page walks through each line.
Step 2: Decide what coverage you actually want
Before you shop, settle on the policy to compare: dwelling limit, all-perils deductible, wind/hail deductible, replacement cost on contents and roof, liability limit, and endorsements such as water backup. If you are unsure, see how much home insurance you need.
Step 3: Get independent quotes at least 30 days before December 1
That means getting your declarations page to an agent by late October or the first days of November. Thirty days leaves time for an inspection if a new carrier wants one, for your lender to update escrow, and for a decision without pressure. A captive State Farm agent can only quote State Farm; an independent agent can price the same coverage across many carriers. At Better Choice we compare 22+ carriers, and a quote takes about 20 minutes; start with our quick quote form.
Step 4: Compare apples to apples
Insist on seeing the dwelling limit, both deductibles, and replacement-cost provisions side by side. A quote that is cheaper because it carries a 2% wind/hail deductible instead of 1% is not cheaper; it is a different product. Our guide to comparing home insurance quotes covers the common traps.
Step 5: Never let coverage lapse
If you decide to move, bind the new policy first with an effective date that matches the day the State Farm policy would renew, then cancel State Farm in writing and send the new evidence of insurance to your mortgage servicer. A gap can breach your mortgage terms and makes you look riskier to every carrier afterward. Our guides on switching from State Farm and what to do when any renewal goes up walk through the sequence.
Step 6: Make the decision on evidence
Judge the renewal by comparison, not percentage. If the market cannot beat State Farm on equal coverage, the 8% is simply the new price of insuring a house in Illinois, and renewing is the right call. If equal coverage costs meaningfully less from a financially strong carrier, moving is reasonable. If you have questions about how a rate was calculated, ask your agent or talk to the Illinois Department of Insurance.
When Is Staying With State Farm Still the Right Call?
Often. We are an independent agency and State Farm is a competitor, so weigh that, but honesty is the whole point of comparing. Staying usually makes sense when:
- Your quotes for identical coverage come back within a small margin of the renewal.
- You have an older roof or a recent claim that other carriers would surcharge or decline. (If a carrier ever does decline or non-renew you, here is what to do.)
- You bundle auto and home and the combined price, not just the home price, is competitive.
- You value a long relationship with a local agent and the difference is small enough that it is worth it to you.
For context, the NAIC Homeowners Insurance Report puts the average Illinois HO-3 premium at $1,480 for 2023, the latest year published; we break that down on our Illinois home insurance page. Rates have moved since then, which is exactly why a current comparison matters more than any statewide average.
If you also own property in Texas, the picture is different again: the Texas Department of Insurance's preliminary average annual homeowners premium for 2025 is $3,489. See our Texas home insurance page, or for Dallas-Fort Worth, our Fort Worth home insurance and Fort Worth office pages.
The Bottom Line
State Farm's 8% Illinois homeowners increase is real, it reaches renewals on December 1, 2026, and the company has published a detailed case for why. None of that tells you whether your new premium is the best available price for your coverage. The only way to know is to compare the same policy across the market, with enough lead time to switch cleanly or renew with confidence.
That is what we do for our clients in St. Charles, across Kane County, and throughout Illinois: we review every renewal and re-shop when an increase is out of line. If State Farm is still your best value, we will tell you that too.
Got a State Farm renewal coming in December? Send us the declarations page and we'll compare the identical coverage across 22+ carriers. Free, no obligation, about 20 minutes. Rated 4.9 stars on Google from 123+ reviews.
Frequently Asked Questions
When does the State Farm 8% Illinois homeowners increase take effect?
According to KFVS, the increase applies to new Illinois homeowners policies starting October 1, 2026 and to renewals starting December 1, 2026. If your policy renews before December 1, you should see the new rate at the following renewal. Your renewal declarations page is the only document that shows your actual new premium.
Will my State Farm home premium go up exactly 8%?
Probably not exactly. An 8% figure is a statewide average across State Farm's Illinois homeowners book. Your own change depends on your ZIP code, roof age and material, claims history, dwelling coverage amount, deductibles, and any discounts that changed. Some households will see less than 8%, others more. Compare this year's declarations page to last year's to see what actually moved.
Does the new Illinois rate-review law stop this increase?
No. House Bill 4273 and Senate Bill 714 take effect July 1, 2027, so they do not apply to December 2026 renewals. Once in effect, the Illinois Department of Insurance can review homeowners rate filings, reject filings that fail the law's standards, and order rebates of excess premium. Companies can still begin charging a filed rate before that review is complete.
Should I leave State Farm because of the increase?
Not automatically. State Farm says it paid $1.22 in claims and expenses for every $1 of Illinois premium over the past three years, and weather losses are hitting every carrier in the state. The right test is comparison: price the same dwelling limit, deductibles, and endorsements with other carriers. If no one beats it meaningfully, staying is a sound decision. If the market is hundreds of dollars lower for equal coverage, switching is worth considering.
How does Better Choice help with a State Farm renewal?
Better Choice Insurance Group is an independent agency that compares 22+ carriers. Send us your renewal declarations page and we will match the coverage line by line and show you what the rest of the market charges for it. Quotes are free, take about 20 minutes, and carry no obligation. For our own clients, we review every renewal and re-shop when an increase is out of line.
Related Reading
- Your Insurance Renewal Went Up. Here's Exactly What to Do Next
- Thinking About Leaving State Farm? What Switching Looks Like
- The State Farm Lawsuits and What They Mean for Your Policy
- Roof Insurance Claims: ACV vs. Replacement Cost
- My Insurance Company Dropped Me. What Now?
- Home Insurance Cost in Illinois 2026
About the author
Evan Larson — Licensed Insurance Agent at Better Choice Insurance Group, an independent insurance agency in St. Charles, Illinois licensed in 14 states.
Last reviewed: October 2026