Allstate Tees up Another Illinois Homeowners Rate Hike

Illinois homeowners insured by Allstate are bracing for another hit next year, as the state’s second-largest provider moves forward with a round of rate increases.

Allstate plans to raise homeowners insurance premiums in Illinois by an average of 8.8 percent beginning Feb. 24, 2026, according to a recent filing with the Illinois Department of Insurance. The increase will affect more than 209,000 policyholders statewide and comes on top of the Northbrook-based insurer’s increase of around 9 percent nearly a year ago, the Chicago Sun Times reported.

Under the new filing, individual increases will range from 4.9 percent to 10.4 percent, with the “typical” homeowner seeing an 8.8 percent bump when their policy renews. Illinois law requires insurers to notify regulators of rate changes, but the state has limited authority to block or roll back increases, leaving consumers with little recourse.

“Allstate is the second-largest U.S. home insurer because we have accurate, competitive prices and are there for customers when they need us,” the company said in a statement. “Illinois rates are being driven by the state’s severe weather events and higher repair costs.”

Consumer advocates aren’t buying it. Abe Scarr, director of the Illinois Public Interest Research Group, called the increase excessive, telling the outlet that Allstate reported $3.7 billion in profit in the third quarter this year. He warned that Allstate’s move could open the door for additional hikes from competitors.

The stakes are high for homeowners and the real estate market alike. Most mortgage lenders require insurance, and rising premiums can strain borrowers who are already stretched by higher interest rates, property taxes and maintenance costs. The outlet reported that in some cases, insurance costs can be the difference between a deal penciling out or not.

Allstate’s filing follows a much steeper move by State Farm, the nation’s largest insurer, which implemented a 27 percent homeowners rate increase in Illinois over the summer, citing rising reconstruction costs after severe weather. That hike drew scrutiny from state officials. In November 2024, Illinois Department of Insurance Director Ann Gillespie demanded ZIP code-level policy data from State Farm, while Attorney General Kwame Raoul filed suit to compel the company to turn it over.

The pressure is building because homeowners were already reeling before the latest increases. A Consumer Federation of America study released in April found the typical Illinois homeowner paid about $1,000 more for coverage in 2024 than three years earlier — a roughly 50 percent jump, the second-highest increase in the country.

Efforts to give regulators more power have stalled. A bill allowing Illinois to reject excessive rate hikes passed the state Senate last fall but died in the House.

— Eric Weilbacher