Michael L. Tipsord Chairman, President and Chief Executive Officer | State Farm, IL
State Farm has announced changes to its insurance rates in Illinois, with auto insurance rates set to decrease and home insurance rates on the rise. The company aims to provide context for these adjustments, emphasizing its commitment to serving policyholders as a mutual company without shareholders.
Auto insurance rates will see an average reduction of 5.7%, effective from July 18, 2025. Some customers may experience premium reductions of up to 15%. This decision is influenced by projections indicating lower claims costs.
Conversely, home insurance rates are increasing due to rising home replacement costs and more frequent severe weather events in Illinois. State Farm notes that the cost of covering homeowners' losses exceeds the premiums collected, with last year's costs amounting to $1.26 for every dollar earned in premiums.
The company highlights that inflation has led to increased repair and rebuilding costs, necessitating rate adjustments. In 2024, Illinois reported more hail damage claims than any state except Texas, underscoring the impact of severe weather.
State Farm encourages policyholders to contact their agents to discuss coverage options and navigate these changes. The introduction of a Wind/Hail Deductible is one measure being implemented to manage rising premiums.