HOMEOWNERS already feeling the crunch of higher prices for everyday goods may be shelling out much more for home insurance.
That’s because one of the nation’s largest insurance companies will soon spike insurance rates.
State Farm is set to impose an insurance hike to a slew of bills[/caption]
On August 15, State Farm will increase insurance rates on Illinois homeowners by more than 27%.
That translates to a boost of about $746 to the average homeowner’s insurance premium.
The average insurance costs are $2,110 a year, or about $176 a month, according to NerdWallet.
“These changes will cost Illinois homeowners hundreds of additional dollars per year without a state-based justification or corresponding increases in protection,” Illinois Gov. JB Pritzker told Fox Business.
WHAT HAPPENED?
State Farm said it’s jacking up costs because of what it’s paying out in the state.
The company said home insurance claims costs are exceeding premiums collected in Illinois.
It mentioned that in 2024, total costs accumulated to $1.26 for every dollar in premium it collected.
The company also said it paid out more in hail damages in Illinois than any other state except Texas.
While Illinois doesn’t typically deal with severe weather like wildfires or hurricanes it does face fierce thunderstorms.
“Such losses are unsustainable,” State Farm told Fox Business.
The National Oceanic and Atmospheric Administration has reported 142 instances of severe hail in Illinois this year and 303 severe hail incidents last year, according to PBS affiliate WWTW.
PUSHING BACK
Some lawmakers are stepping in to protect homeowners.
Pritzker is establishing a rate review system that would require companies to submit proposed increases to the Illinois Department of Insurance for review.
The department can deem a rate hike as “excessive, inadequate, or unfairly discriminatory.”
If so, the department could reject it before it takes effect.
A companion bill would require insurance companies to explain premium changes each year in plain English to the public, according to Realtor.
Ways to lower your home insurance premiums
If your premiums are going up, there are ways you can save.
- Compare quotes from different companies
- Switch insurers if you find a better deal
- Consider bundling policies if it saves you money
- Consider taking a higher deductible
- Make your home more disaster-resistant for discounts
“Fundamentally, we think that rate increases of this size shouldn’t be allowed to go through without some scrutiny from public institutions,” Director of the Illinois Public Interest Research Group Abe Scarr told WWTW.
“This makes the case quite clearly for the need for Illinois to adopt very basic consumer protections that almost every other state has.”
Moreover, Rep. Thaddeus Jones wants to hold public hearings.
These will allow residents to express their sentiments toward rate increases and how it impacts their lives.
