CHICAGO — Illinois homeowners are heading into 2026 with another major cost increase on the horizon: Allstate has filed to raise homeowners insurance rates statewide, following State Farm’s headline-making hike earlier this year. The back-to-back moves are intensifying a political fight in Springfield over how (and whether) Illinois should regulate home insurance prices, while consumer advocates warn affordability is eroding for hundreds of thousands of families who have little choice but to keep coverage to satisfy mortgage requirements. Chicago Sun-Times
What’s unfolding in Illinois mirrors a broader national trend—homeowners premiums have climbed sharply across much of the U.S.—but the state’s unusually limited rate oversight is putting a brighter spotlight on insurer filings, profit figures, and the data regulators say they need to determine whether increases are justified. ABC7 Chicago
How much is Allstate raising homeowners insurance rates in Illinois?
Allstate customers in Illinois are expected to see an average homeowners insurance rate increase of 8.8%, starting Feb. 24, 2026, according to a filing referenced in reporting by the Chicago Sun-Times. The filing would affect more than 209,000 policyholders, with increases ranging from 4.9% to 10.4%, depending on the policy. Chicago Sun-Times
ABC7 Chicago separately reported that Allstate’s Illinois homeowners rates would rise by “more than 8%” effective Feb. 24, aligning with the timeline and magnitude described in the Sun-Times coverage. ABC7 Chicago
Allstate attributed the increase to severe weather and higher repair costs, saying Illinois pricing reflects local risk and rebuilding expenses. Chicago Sun-Times
Why Illinois homeowners are feeling “rate-hike whiplash”
Allstate’s filing lands just months after State Farm implemented an average 27% homeowners rate increase in Illinois during the summer of 2025—an increase that sparked public backlash from top Illinois officials and helped revive long-stalled debates about consumer protections in insurance pricing. Chicago Sun-Times
In July, the Sun-Times reported that State Farm said new policyholders would see the adjusted rate beginning July 18, 2025, while current customers would face the change starting Aug. 15, 2025. State Farm also put the scale of its Illinois footprint in stark terms: nearly 1.5 million customers with an average premium “about $1,700.” Chicago Sun-Times
State Farm’s public argument has been consistent: inflation and storm-related repair costs have surged, and the company says its homeowners line has been unprofitable—paying out more in claims than it collects in premium. Chicago Sun-Times
The political flashpoint: Illinois’ limited power to block rate hikes
At the center of the Illinois debate is a reality that repeatedly appears in local reporting: Illinois has fewer tools than other states to review and rein in homeowners insurance increases. ABC7 Chicago
An ABC7 report on failed legislation said Illinois is the only state without a law prohibiting “excessive, inadequate or discriminatory” premiums and the only state without authority to review rates for homeowners or auto insurance—one reason consumer groups and some lawmakers are pushing for changes in 2026. ABC7 Chicago
The same ABC7 coverage described a House vote in November that rejected a proposal that would have expanded the Department of Insurance’s authority, including added notice requirements for major increases and stronger review tools. ABC7 Chicago
Data wars: Attorney General Raoul’s lawsuit against State Farm
The rate-hike fight is also a transparency fight.
In October 2025, Illinois Attorney General Kwame Raoul announced a lawsuit seeking to compel State Farm to comply with a regulatory examination connected to its nationwide homeowners business—an unusually high-stakes move rooted in a key Illinois fact: State Farm is headquartered in Bloomington, giving Illinois regulators “primary oversight nationwide,” according to the attorney general’s office. Illinois Attorney General
Raoul’s office said the Department of Insurance is seeking ZIP-code-level nationwide data, including premiums collected, coverage types and limits, and the number of claims—information the state argues is needed to assess whether homeowners are being treated fairly and to better understand market pressures. Illinois Attorney General
In the same announcement, Raoul framed the dispute as fundamental to consumer protection, warning that refusal to provide the data “prevents” regulators from obtaining information necessary to oversee the market. Illinois Attorney General
How much have Illinois home insurance premiums already climbed?
Even before the latest Allstate filing, Illinois homeowners had already been grappling with outsized premium growth.
A widely cited Consumer Federation of America (CFA) analysis found Illinois posted one of the largest jumps in the nation from 2021 to 2024: 50%, second only to Utah. Consumerfed
For a “typical” homeowner policy modeled at $350,000 replacement value, CFA’s figures show Illinois rising from $1,968 (2021) to $2,942 (2024)—an increase of $974. Consumerfed
The Sun-Times illustrated what that looks like on the ground with individual homeowners, including a Chicago two-flat owner who said she spent a year trying to find a better rate, only to be rejected by insurers that didn’t want her older home—while her premium rose substantially over a few years. Chicago Sun-Times
CFA leaders have warned the trend doesn’t just squeeze current owners; it can also reshape the housing market by increasing the monthly payment for would-be buyers who already face elevated mortgage rates and property taxes. Consumerfed
What insurers and industry groups say is driving the increases
The public justification for Illinois rate hikes has centered on a cluster of forces insurers say are compounding at once:
1) Severe weather and rebuilding costs
Allstate told reporters that Illinois pricing is being pushed by “severe weather events and higher repair costs.” Chicago Sun-Times
State Farm similarly linked its increase to higher rebuilding and repair costs after storms, arguing inflation and more frequent severe events have changed the math. Chicago Sun-Times
2) Midwest hail and “severe convective storms”
In response to criticism from Gov. JB Pritzker, State Farm said Illinois had more hail damage claims than any state except Texas in 2024, totaling $638 million, and insisted that “Illinois rates are based on Illinois risk.” Chicago Sun-Times
3) “Rates reflect risk”—and an argument against heavy regulation
In the Allstate coverage, Mark Friedlander, a spokesperson for the Insurance Information Institute, pushed back on the idea that Illinois homeowners are subsidizing losses elsewhere and cautioned that politicized rate regulation can backfire—arguing increases reflect real, rising costs tied to disasters and inflationary pressures. Chicago Sun-Times
In earlier Sun-Times reporting about the CFA study, Dave Snyder of the American Property Casualty Insurance Association disputed what he said was missing context—pointing to underwriting losses insurers report in Illinois and listing common drivers like inflation, rebuilding costs, and severe weather. Chicago Sun-Times
What consumer advocates say: profits, market power, and weak oversight
Consumer advocates don’t dispute that storms and rebuilding costs are rising. Their argument is that Illinois homeowners are being asked to absorb large increases without enough transparency—or meaningful state leverage to determine whether hikes are excessive.
In the Sun-Times Allstate story, Abe Scarr of Illinois PIRG called Allstate’s filing “excessive,” citing the company’s reported profits and warning that when two carriers with a combined large market presence raise rates, the ripple effects can hit hundreds of thousands of households quickly. Chicago Sun-Times
Illinois PIRG also highlighted the scale of Allstate’s filings and timing, saying the company’s December 2025 filing totaled more than $58 million and would impact nearly 300,000 policyholders, with the increase scheduled to take effect Feb. 24, 2026. PIRG
Meanwhile, Allstate’s own financial reporting shows the company had net income applicable to common shareholders of $3.7 billion in Q3 2025, a figure frequently cited by critics when arguing insurers can absorb more risk without pushing costs onto homeowners. Business Wire
Springfield’s next move: competing ideas, real trade-offs
Illinois lawmakers have floated a range of approaches, from tighter prior-approval requirements to caps and public comment periods.
In the summer State Farm coverage, state Sen. Michael Hastings described a proposal that would require prior approval for rate increases of 5% or more, add a public comment period for increases above 10%, and cap annual hikes at 15% unless evidence shows higher disaster claims. The Sun-Times reported the proposal did not advance. Chicago Sun-Times
At the same time, some editorial voices have urged caution. A Chicago Tribune editorial board social post about the Allstate move argued Springfield should respond “albeit cautiously,” reflecting concerns that overly aggressive rate controls could reduce competition or push insurers to pull back coverage. X (formerly Twitter)
The tension is the core policy question facing Illinois in 2026:
- How do you stop unjustified increases (or force transparency)
without - making coverage harder to get (or pushing insurers out of the market)?
There isn’t an easy answer—especially as insurers emphasize catastrophe risk and consumer advocates emphasize affordability and market power.
What Illinois homeowners can do now before your next renewal
If your premium jumps at renewal—whether with Allstate, State Farm, or another carrier—consumer agencies and insurance groups recommend taking concrete steps to avoid overpaying or ending up underinsured.
Compare deductibles and consider adjusting them
Illinois’ Department of Insurance advises consumers to compare deductibles carefully and choose one you can realistically pay out-of-pocket; higher deductibles can lower premiums. Illinois
Shop around—and ask about bundles and discounts
The Insurance Information Institute’s consumer guidance includes: shopping around, bundling home and auto, seeking discounts, and making your home more disaster-resistant. III
Review what you’re actually insuring: replacement cost vs. payout rules
In the Sun-Times CFA coverage, CFA insurance director Douglas Heller warned that premium pressure can push homeowners into cheaper policies that may not pay enough after a loss—especially if depreciation is applied when settling claims. Chicago Sun-Times
If you can’t find coverage, know the “last resort” option
For homeowners who are repeatedly denied in the standard market, Illinois has the Illinois FAIR Plan, a nonprofit association created to offer basic property coverage to applicants who can’t obtain insurance through traditional carriers. It’s generally considered a market of last resort. Illinoisfairplan
(FAIR Plan coverage can be more limited and/or more expensive than standard policies, so it’s typically something to discuss with an agent after you’ve exhausted other options.)
Bottom line: another big year for Illinois home insurance, politics, and household budgets
Allstate’s planned Illinois homeowners increase—averaging 8.8% starting Feb. 24, 2026—may look smaller than State Farm’s 27% jump, but it’s landing in a state where premiums have already surged and where political leaders are openly arguing over whether insurers are being transparent and whether regulators have enough power to protect consumers. Chicago Sun-Times
For homeowners, the most immediate reality is practical: shop, compare, and review your coverage before renewal—because even small percentage increases can translate into hundreds of dollars a year when premiums are already near $3,000 for many typical policies. Consumerfed
