Illinois Home Insurance Premiums Skyrocketing

Even without the natural disasters driving home insurance hikes in other states, homeowners across Illinois are paying significantly more to protect their properties.

Home insurance premiums in Illinois soared 50 percent between 2021 and 2024, the second-largest increase in the country after Utah’s 59 percent jump, Crain’s reported, citing data from the Consumer Federation of America.

The spike far exceeds the national average of 24 percent over the same period.

The increase brings the average annual premium for an Illinois home with a $350,000 replacement value to $2,942, up $974 in just three years. It puts the state at 20th nationwide for total cost. Premiums in the Chicago metro rose 46 percent, though homeowners in rural parts of the country now pay even more on average than those in urban areas.

Rising costs for building materials and labor, as well as relaxed state-level oversight, are fueling the surge.

Illinois hasn’t faced major disasters like wildfires or hurricanes, but unlike California and Florida, its regulators don’t have the authority to deny premium increases. In Illinois, homeowners are only notified once the hikes take effect.

The situation is drawing scrutiny from lawmakers and consumer advocates. Illinois state Sen. Christina Castro has introduced legislation that would give the Department of Insurance power to approve or deny future increases.

The regulatory system has a “gaping hole” in consumer protection, and Illinois should offer residents the same safeguards found in nearly every other state, said Abe Scarr, director of the Illinois Public Interest Research Group.

Without intervention, many homeowners may be forced to accept worse coverage, pay higher deductibles or even drop insurance altogether. The consumer federation warned that escalating rates are already pushing millions of Americans in that direction.

Rising operating costs are squeezing consumers and insurers alike. State Farm and Allstate have requested rate increases of more than 12 percent in the past year.

Insurers in some states are pulling out altogether, but Illinois remains a battleground for how regulators and lawmakers respond to mounting pressure from both sides, as well as how much relief, if any, is on the horizon for homeowners.

— Judah Duke