State Farm, the Bloomington-based insurance giant, is implementing significant rate changes for Illinois customers, with auto insurance rates decreasing while home insurance rates spike dramatically. The company announced these changes as part of its response to evolving claims patterns and severe weather trends affecting the state.

State Farm will reduce auto insurance rates by an average of 5.7%, with some customers seeing premium reductions of up to 15%, according to a press release. The rate adjustments apply to both new and existing policies starting July 18, 2025, just one day from the current date.

Illinois homeowners face a much different reality. State Farm is implementing a 27% average increase in home insurance rates, affecting approximately 1.5 million policyholders across the state. The rate hike takes effect July 15, 2025, for new policies and August 15, 2025, for renewals.

State Farm attributes the dramatic home insurance rate increase to unsustainable losses in its Illinois homeowners’ business. The company reported that total costs amounted to $1.26 for every dollar in premium collected in 2024, with the previous year showing $1.30 per dollar. This represents what the company calls “unsustainable” losses that have occurred in 13 of the last 15 years.

The rate increases have drawn sharp criticism from Illinois Governor JB Pritzker accused the company of shifting out-of-state costs onto Illinois homeowners.

Now, Pritzker is asking the General Assembly to pass legislation “that prevents insurance companies from taking advantage of consumers through severe and unnecessary rate hikes like those proposed by State Farm,” during the October veto session.

“Over the past six years, our state economy has flourished based on transparent markets and fair competition,” Pritzker said. “State Farm’s actions are antithetical to the core principles that the Illinois business community is built on.”

State Farm has denied Pritzker’s accusation that the “increases are predicated on catastrophe loss numbers that are entirely inconsistent with the Illinois Department of Insurance’s own analysis.” He indicated that State Farm is shifting out-of-state costs onto the homeowners in Illinois.

“Hard-working Illinoisans should not be paying more to protect beach houses in Florida,” Pritzker said.

State Farm claims that it paid $638 million in hail damage claims in Illinois last year.