State Farm said Friday that Gov. JB Pritzker’s attacks on its 27% homeowners’ insurance rate increase are “factually incorrect” political rhetoric.
The Bloomington-based company has responded forcefully to Pritzker’s claims, which became public Thursday in a statement to the media. Pritzker claims an Illinois Department of Insurance analysis suggests “State Farm is shifting out-of-state costs onto the homeowners in our state.” He called the rate increase “unfair and arbitrary.”
In a statement Friday, State Farm said that “Illinois families deserve an honest conversation about insurance economics rather than political rhetoric.”
“Governor Pritzker's statements are factually incorrect. State Farm does not shift costs between states, and we have provided information to the Illinois Department of Insurance to demonstrate this fact. Our Illinois rates reflect Illinois-specific claims and risks,” the company said.
Pritzker’s attacks on State Farm were a rare public rebuke for one of Illinois’ largest employers, and one of the largest companies headquartered in Illinois. It comes as Pritzker runs for re-election in 2026 and is widely considered to be a Democratic presidential candidate in 2028.
“State Farm has called Illinois home for more than a century,” the company said Friday. “More than 21,000 people in Illinois proudly serve customers as State Farm agents, agent team members and State Farm employees. Our commitment is to keep rates competitive while staying financially strong—so we can deliver on our promises when people need us most.”
What regulators can (can’t) do
The Illinois Department of Insurance declined WGLT’s request for an interview with Director Ann Gillespie or another DOI staffer. It did not provide a reason why. WGLT has requested a copy of the “analysis” that Pritzker said indicates State Farm is “shifting out-of-state costs” to Illinoisans.
“The Illinois Department of Insurance has requested information specific to State Farm’s rate filing, which raised serious questions as to whether their specific rate increases were based solely on Illinois experience,” the agency said in a statement Friday. “We requested further information from State Farm to provide greater transparency into their market practices, but they have repeatedly refused to provide the requested information.”
The Department of Insurance can open “market conduct” or “financial” exams on insurers, though it’s restricted by law from publicly sharing details of an exam in progress until it’s completed, which can take years. Pritzker has said the Department of Insurance will “take all available regulatory action to enforce the law and ensure a level playing field for Illinois homeowners.”
He’s also urged state lawmakers to consider legislation during the upcoming veto session that would give regulators more power over insurers. The Department of Insurance doesn’t have much power. Illinois is the only state that does not prohibit rates from being “inadequate, excessive or unfairly discriminatory,” meaning the Department of Insurance cannot reject a rate filing for those reasons.
Change will impact 1.5 million policyholders
The rate increase will impact 1.5 million policyholders in Illinois. For the owner of a typical home in Bloomington-Normal, it would be hundreds of dollars per year. The changes would go into effect July 15 for new customers, and Aug. 15 for renewals, according to State Farm’s filing with the state.
State Farm said the significant rate increase was actually caused by inflationary pressures on home replacement costs and more frequent severe weather events that are driving up the cost and frequency of claims. Those dynamics are playing out in insurance markets across the U.S.
“We value our partnerships with state leaders and continue to work together toward finding solutions that allow us to continue serving customers and promote a healthy and competitive insurance market,” State Farm said.
State Farm said its total costs amount to $1.26 for every $1 in premium it collects.
That appears to be a reference to its combined ratio — a key measure of an insurance company’s underwriting profitability. It compares the insurer’s expenses and losses to premiums paid by customers. A combined ratio over 100% means a company is losing money on underwriting. Under 100% means it’s profitable; 100% would be break-even.
Indeed, State Farm’s combined ratio for Illinois homeowners was 126% in 2024, and 130% in 2023, according to a filing with the Illinois Department of Insurance. Yet those losses are not that atypical for State Farm. The company’s combined ratio has been above 100% in 12 of the past 14 years, and it’s been over 120% in 7 of the past 14 years.
“No company can absorb such losses forever and still be there for customers when disaster strikes,” the company said Friday.
