Climate change is fueling a surge in Illinois home insurance premiums

This coverage is made possible through a partnership between WBEZ and Grist, a nonprofit environmental media organization.

Illinois home insurance premiums are going up, and climate change-powered severe weather is in part to blame.

Average U.S. home insurance rates climbed 12% last year and are projected to surge another 4% in 2026, according to new nationwide data from the insurance price tracker Insurify. Illinois is expected to top the national average with a 5% increase, leaving policyholders statewide paying an average $3,559 premium per year.

“I wouldn't be surprised if it's higher than that at the end of this year,” said Abe Scarr of the consumer-protection nonprofit Illinois Public Interest Research Group, relying on trends he says his group has seen in recent years.

Between 2021 and 2024, home insurance costs increased by about 50% in Illinois, costing homeowners close to an additional $1,000 per year, according to a Consumer Federation of America report. In the same time period, only Utah experienced a higher rate jump.

There are a lot of factors behind rising insurance bills: Companies consider the value of a home, the cost of the materials needed to rebuild it, and even the credit scores of the homeowner. But, according to Insurify’s Matt Brannon, one of the primary culprits is the rising toll of extreme weather as the planet warms. Developers are also building homes in flood-prone areas, adding to rising premiums.

Insured losses from natural catastrophes in the U.S. averaged $100 billion a year between 2023 and 2025, up from an annual average of around $15 billion per year a decade earlier, according to the Insurance Information Institute.

State Farm, the largest home insurer in the country, announced plans to raise homeowner insurance rates by more than 27% across the state last summer. Not far behind, Allstate, the nation’s second-largest home insurer, filed for increases totaling almost 9% on average for more than 200,000 Illinois policyholders.

Both Illinois-based insurance giants pointed to extreme weather as driving up costs. In 2024, only Texas reported more hail damage than Illinois, according to State Farm.

There’s very little Illinois can do about the excessive rate hikes, according to Scarr.

“We are an outlier nationally,” he said. “Our insurance regulators have no authority to reject or modify excessive rate hikes.”

Insurers in Illinois can increase rates by filing a hike with state regulators and proceed without any additional oversight or approval, Alfonso Pating, a financial regulation specialist with Natural Resources Defenses Council said.

At least 14 other states require prior approval of the proposed rate above certain thresholds before new rates can go into effect. In California, for example, increases over 7% must first be first reviewed by the state insurance agency.

Illinois Gov. JB Pritzker railed against the steady stream of homeowner insurance rate hikes, calling the spiraling costs “nothing short of a crisis” in February during his budget proposal address. Legislators tried and failed to pass a bill limiting price hikes last fall, but Pritzker is still urging the state lawmakers to revive the bill. Last week, the Illinois House of Representatives gave the legislation a second shot and advanced it to the Senate.

“Companies have to justify why they are charging this rate, and then the department will review those justifications and see if they appear reasonable or not,” the bill co-sponsor and state Rep. Robyn Gabel, a Democrat from Evanston, told WBEZ. “This is to make sure that the companies are charging a sound rate that's not too high and not too low — we don't want the companies to go out of business.”

Gabel added that the legislation would help the state confirm insurers were not shifting losses from out of state disasters onto Illinois policyholders. Last summer, Pritzker and other top Illinois Democrats first raised concerns that insurers were shifting losses onto Illinois consumers. State Farm told WBEZ in a statement that “Illinois premiums are priced for the risk in this state — not for losses in other states.”

Last fall, Attorney General Kwame Raoul sued to force State Farm to turn over nationwide data to understand rising premiums prices. Raoul’s office confirmed that the case is still pending.

Sen. Gabriela Guzman, a co-sponsor of the Senate bill and a Chicago Democrat, called the legislation basic consumer protection that would prevent Illinois families from paying excessive premiums without transparency into how rates are set.

“We are already seeing the impacts of the climate crisis show up in people’s monthly bills, and rising homeowners insurance costs are one of the clearest examples,” she said.