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Study finds Illinois homeowners insurance premiums skyrocketed 50 percent between 2021 and 2024 (Updated)

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* Press release…

Today, the Consumer Federation of America (CFA) published a new report that shows American homeowners saw their insurance premiums increase by an average of 24% over the past three years. Nationally, CFA found homeowners saw their insurance premiums rise twice as fast as inflation between 2021 and 2024, which amounts to a $21 billion total price hike for Americans.

The study authors of “Overburdened: The Dramatic Increase in Homeowners Insurance Premiums and its Impacts on American Homeowners” used proprietary industry data purchased for this research to evaluate the growth in insurance premiums for typical homeowners in every ZIP code in the country.

* From the study…

The states with the greatest percentage increase in premiums were Utah (59 percent), Illinois (50 percent), Arizona (48 percent), and Pennsylvania (44 percent). The states with the greatest premium hikes in absolute dollars were Florida ($2,118 increase), Louisiana ($1,775), and Kentucky ($1,426). […]

Homeowners in rural areas also experienced steep premium increases. Premiums charged to homeowners in rural ZIP codes rose by 22 percent from 2021 to 2024 (compared to 25 percent in urban and suburban ZIP codes). Annual premiums in rural ZIP codes were $3,317 on average in 2024, compared to $3,299 in urban and suburban areas.

Yikes.

* Recommendations…

1. Require insurance companies to publicly release data on homeowners insurance underwriting, pricing, coverage, and claims every year. Mortgage lenders have been required to report detailed, annual mortgage data under the Home Mortgage Disclosure Act (HMDA) since 1975, to protect against housing discrimination and ensure that all communities are served. As homeowners insurance increasingly determines who can own a home, insurers should be required to report homeowners insurance data in the same manner.

2. Invest federal and state dollars in housing resiliency and require insurance companies to reward risk reduction with lower premiums. The federal government, as well as states, should adopt and expand grant-based and low-interest-loan risk mitigation programs. These programs can help homeowners better protect their homes, such as through roof fortifications. Given their large investment portfolios, insurance companies should become direct investment partners in these projects. In addition, states should require insurers to reward these loss prevention investments with lower premiums.

3. Create a public reinsurance program to stabilize the American property insurance market and to expand the availability of affordable, quality homeowners insurance. A federal public catastrophe reinsurance program would make available additional – and lower cost – coverage to domestic homeowners, insurers, and state insurers of last resort than the unregulated global reinsurance market currently offers. By adding more risk transfer capacity, the program would loosen the grip of these global companies and insulate consumers from unrestrained cost increases in that market. In exchange for access to this lower cost capacity, participating insurers would have to cover all natural disasters in their homeowners insurance policies and increase availability of their coverage across the country.

* Illinois PIRG notes that the state’s Department of Insurance drafted this bill to implement rate review for auto and homeowners insurance. SB268 is still in a Senate committee, but its passage deadline has been extended to April 4…

Creates the Insurance Fairness and Consumer Protection Law Article of the Illinois Insurance Code. Provides that insurers must submit a request for approval to the Department of Insurance for any proposed rate increase for homeowners insurance premiums or automobile insurance premiums. Prohibits implementing any rate increase without prior written approval of the Department. Prohibits using nondriving factors, such as credit score, occupation, and education level, to determine automobile insurance premiums. Provides that, for homeowners insurance, factors unrelated to the insured property’s location, age, and condition shall not be considered in rate setting. Requires a public disclosure and comment period for any proposed rate increase exceeding 10% in a 12-month period. Prohibits an insurer from increasing premiums by more than 15% per year for any policyholder without exceptional justification, which must include specified evidence. Sets forth provisions concerning definitions; penalties; reimbursement of consumers; market conduct actions; Department approval of rate increases; and rulemaking. Effective immediately.

Chief opponents include the National Association of Mutual Insurance Companies, the Illinois Chamber of Commerce and the American Property Casualty Insurance Association.

…Adding… Joint statement from the insurance industry…

While tornadoes and flooding in Illinois and across the Midwest have led to significant home damage and an increase in claims, compared to the rest of the country, Illinois boasts a competitive insurance marketplace with over 200 companies competing to serve consumers. Legislation to bring California-style overregulation to Illinois and to limit how insurance companies calculate risk, would limit competition and lead to higher rates. While the legislation currently being considered is the wrong path forward, the insurance industry in Illinois will continue to work with the General Assembly and the Illinois Department of Insurance on commonsense solutions that will preserve our competitive marketplace and protect consumers.

Key Points:

• The CFA’s report is a flawed and unreliable analysis. The CFA does not use actual premiums charged to customers as the basis for its findings but instead uses premiums quoted to hypothetical customers.
• The report also fails to acknowledge that insurance premiums are driven primarily by losses and claims costs.
• Illinois experienced 120 reported tornadoes in 2023, the most in the nation.
• Homeowners insurers in Illinois had an average of 6.2% underwriting loss over the last decade, with a massive 27.6% underwriting loss in 2023. This is not sustainable.
• Banning certain risk factors like credit leads to rate increases for most consumers. When Washington state banned the use of credit scores in setting auto insurances rates in 2021, more than 60 percent of drivers experienced rate hikes.
• Research shows that using credit alone saves consumers between 30-59% on their auto insurance rates.

posted by Rich Miller
Tuesday, Apr 1, 25 @ 11:43 am

Comments

Validating to see that there is a study to back up what I have personally observed with runaway premiums. Just not sure how to best regulate the insurance industry. We see in CA (where they have similar legislation re: rate increase approvals) the real effect of it - insurers just abandoning the market entirely. Which leads to fewer providers, higher risk for the ones that ARE active, thus leading to higher rates, etc. Especially frustrating that you can be a paying policyholder for years with no claims and still be subject to such increases. Loathe as I am to say the federal government should be the solver of problems, point number 3 about spreading the risk transfer capacity across a larger population is intriguing.

Comment by Chambanalyst Tuesday, Apr 1, 25 @ 11:56 am
Although I am only a renter and not a homeowner (and I choose, for personal reasons, to be a “renter for life” and not deal with the stress of homeownership), I wonder what amount of the homeowners premium increase was just for 2023 in the Springfield area with the historic storms we received here that year? Starting off with the Sherman tornado Mar. 31, 2023, then the 7 rounds of hailstorms of Biblical proportions in about a 4-hour period in Chatham that May 7, then the June 29 derecho.

Comment by Leatherneck Tuesday, Apr 1, 25 @ 12:07 pm
IL Chamber is tone deaf on this. $21K in the campaign checking account will really move the needle. It was a loss when Todd passed, the organization is not what it once was.

Comment by TrumpEdgarVoter Tuesday, Apr 1, 25 @ 12:18 pm
I hope those recommendations are state- or market- specific. Midwesterners should not subsidize problems underwriting the Gulf coast or the west coast.

Comment by Socially DIstant Watcher Tuesday, Apr 1, 25 @ 12:18 pm
“Create a public reinsurance program to stabilize the American property insurance market and to expand the availability of affordable, quality homeowners insurance. A federal public catastrophe reinsurance program would make available additional – and lower cost – coverage to domestic homeowners, insurers, and state insurers of last resort than the unregulated global reinsurance market currently offers.”

The federal government should absolutely not do that without significant conditions attached. Federally backed discount insurance for homes that will constantly get hit by hurricanes or flooding due to global climate change is a horrible idea. Now if the deal is “if your house gets destroyed in disaster prone area (such as areas increasingly prone to flooding, fires, and hurricanes, etc.), we will cut you a check, but the government now owns the land and won’t let anyone rebuild housing there in perpetuity”, then it might make more sense.

Comment by Benniefly2 Tuesday, Apr 1, 25 @ 12:24 pm
i know more people who filed claims for new roofs/siding, who were eager to have those items replaced due to the age of their roof, than people who had visible damage that would necessitate a claim. I also know that many of those new roofs were replaced at a much higher cost than i have seen, asphalt shingle roof replacements for $40k, $60k etc. we are now experiencing the socialization of those costs, and we will all pay for those new roofs and exorbitant contractor costs

Comment by Merica Tuesday, Apr 1, 25 @ 12:24 pm
I must be doing something right. I suppose doing little upgrades over the years whenever the building code was updated may have helped.

My insurance has gone up maybe 50% - since 2006. Market value of the house has gone up by more than 100% in that same time.

The largest year over year increase I saw was back in the mid ’10s when the insurance company merged the inside property coverage with the total dwelling coverage. Before that I was able to sizeably adjust down the coverage for the items inside the house, which lowered by total premium by probably 15% at the time, because I had nowhere near the amount of stuff I was being given a dollar amount coverage for. Once that inside coverage was merged and tied to the total dwelling coverage, that savings went away.

Comment by TheInvisibleMan Tuesday, Apr 1, 25 @ 12:27 pm
=who were eager to have those items replaced due to the age of their roof, than people who had visible damage

I see that type of statement made often, and there are unscrupulous storm chasers, sure. But I also know that every claim has to be approved by an adjuster hired by the insurance company, and they have high standards to prevent unwarranted work or fraud.

Comment by Donnie Elgin Tuesday, Apr 1, 25 @ 12:34 pm
Global warming is real. Insurance companies are pulling out of high-risk regions left and right, and raising rates where they stay. This is the reality in which we find ourselves, as roughly half the population ignores the problem and does everything they can to make it worse.

At this point, any policy to address these things at the state level necessarily has to take into account conservative malfeasance both at the federal level and in other states.

In order to fix something that’s being actively sabotaged, you have to first make it resistant to the ongoing sabotage.

On top of spiking insurance costs, we know that tariffs and gutting of public services is going to result in higher prices for food and medical care, for those who can still access food and medical care.

In short: This is just the beginning. Trump promised policies that could only possibly result in stagflation, and the GOP is delivering. This intentional destruction is taking place against a background of uncontrolled global warming, which carries its own costs.

On top of that, we’re effectively swinging a broken bottle at every friend we’ve ever had. Our trading partners are realigning in response. It’s not even a with us/against us scenario. The whole world’s trade is realigning AROUND us as a result of our doing this more than once in a relatively short time period. We proved it wasn’t a fluke. The world took note. Those supply lines and trade partners aren’t coming back. They’re just gone to us, hitting both supply and demand.

Anyone barely hanging on now needs to start figuring out how they’re going to manage when things get worse.

Comment by Bob Tuesday, Apr 1, 25 @ 12:37 pm
A big source of residential property casualty claims in Illinois is kitchen grease fires caused when people drinking alcohol fall asleep in front of a sporting event broadcast. Sober adults deserve discounts on insurance premiums.

Comment by Jack in Chatham Tuesday, Apr 1, 25 @ 12:39 pm
=i know=

Do you? Evidence?

=we are now experiencing the socialization=

That is not a “now” thing. That is how insurance has worked since forever.

Comment by JS Mill Tuesday, Apr 1, 25 @ 12:50 pm
Looking at the price of building materials and hiring contractors rates had to increase some, though 50% seems a bit excessive. I’m curious if our rates were significantly lower than the rest of the US before.

I’m sure some amount of trying to make up for losses elsewhere is tied in to it. 50% in 4 years yikes.

Comment by Mason born Tuesday, Apr 1, 25 @ 12:55 pm
Literally federalized property insurance is just going to have us subsidizing red states that consistently vote for more global warming and higher property insurance premiums.

We cannot afford to keep subsidizing red America.

Comment by Bob Tuesday, Apr 1, 25 @ 12:56 pm
In 2020 and 2021 my home insurance was $725-740. then magically in 2022 it went up to $1,100.

Comment by Baloneymous Tuesday, Apr 1, 25 @ 12:57 pm
Talk to any insurance agent and they will confirm that in Illinois one of the biggest cost drivers recently has been a rash of fraudulent roof damage claims allegedly due to hail damage- its become a new
Fee fest by trial lawyers

Comment by Sue Tuesday, Apr 1, 25 @ 1:12 pm
Government needs to bring insurance companies under control to prevent this sort of activity. It’s absolutely absurd to have insurance premiums increase 50% over that time period. Insurance companies need some heavy regulation with regard to how they set premiums.

Comment by Demoralized Tuesday, Apr 1, 25 @ 1:13 pm
In my experience, that is low. Mine went up over 30% for each of the last to 2 years.

Comment by RNUG Tuesday, Apr 1, 25 @ 1:20 pm
==rash of fraudulent roof damage claims ==

Insurance companies have adjusters that decide that. If the insurance companies are having a “rash of fraudulent” claims then that’s their own fault for paying them out.

And I’m not sure what trial lawyers have to do with roofing claims. I made a claim for my roof and nowhere in the process was a lawyer involved.

Comment by Demoralized Tuesday, Apr 1, 25 @ 1:26 pm
Insurance companies raise premiums when 1) their investments underperform, and 2) there is not enough market pressure to keep rates reasonable.

This is why the “Public Option” is important to not just health care insurance, but also life, liability, retirement, and mortgage.

Comment by Thomas Paine Tuesday, Apr 1, 25 @ 1:26 pm
== rash of fraudulent roof damage claims ==

If you have a metal roof, the companies have been adding a cosmetic damage exclusion for those types of roofs. Just looking bad won’t get it replaced.

Comment by RNUG Tuesday, Apr 1, 25 @ 1:28 pm
Taxes and insurance on my house have increased $150 a month since I bought it 5 years ago. It’s as much as my monthly mortgage payment.

Comment by Notorious JMB Tuesday, Apr 1, 25 @ 1:33 pm
I know I have experienced huge increases also.

I would love to have an objective study on WHY. Some real data analysis to see how much of this is justified. And location specific, at least by zip code.

Is this out of the purview of our State government?

Comment by Mason County Tuesday, Apr 1, 25 @ 1:44 pm
“This is why the “Public Option” is important to not just health care insurance, but also life, liability, retirement, and mortgage..”

I know everyone’s health insurer is demonic, but that’s essentially its own industry. No insurer provides, for instance, health insurance and auto, or health insurance and commercial liability. Health insurance is its own, twisted thing.

I’m not sure I can think of a worse idea than government funded liability insurance. Talk about subsidizing exactly the wrong kind of risk-taking. At some point we need to learn from mistakes not repeat them. There’s nothing insurance markets can do about Florida going under the water or California being full of kindling for 6 months per year, every year. If you can afford to build your house on a hillside next to the ocean that’s great, you can self insure it rather than ask other Americans to subsidize your indulgence.

Comment by Larry Bowa Jr. Tuesday, Apr 1, 25 @ 1:57 pm
==Talk to any insurance agent and they will confirm that in Illinois one of the biggest cost drivers recently has been a rash of fraudulent roof damage claims allegedly due to hail damage- its become a new
Fee fest by trial lawyers==

Sue, “any insurance agent”? That’s just not true, it’s crazy talk but true to form.

Comment by don the legend Tuesday, Apr 1, 25 @ 1:57 pm
Don- your wrong- any of your neighbors have cedar shake roofs- they can not even renew unless they change their roofs-i spoke to my AAA Agent and he confirmed- roof claims/ lawsuits are off the charts

Comment by Sue Tuesday, Apr 1, 25 @ 2:14 pm
Last fall, we asked our insurance agent to look for lower cost policies for home and auto insurance. Switching to a new insurance company lowered our combined premium costs for over $800.

Comment by Huh? Tuesday, Apr 1, 25 @ 2:45 pm
Never forget that both State Farm and Allstate are headquartered in Illinois, and each carry enormous lobbying power. We are surprisingly one of the least regulated states from a P&C perspective. I can tell you that increases are actuarilly justified at the same time though.

Comment by Henry Tuesday, Apr 1, 25 @ 3:43 pm
This study tracks with what we have experienced with the cost of our house insurance. It seems strange that IL costs have gone up when the major storm and fire damages have been sustained on the coasts. With all of the safeguards the insurance companies have built into prevention of paying for fraudulent claims, I find the fraudulent roof damage claims suspect.

Comment by Just a Citizen Tuesday, Apr 1, 25 @ 3:58 pm
=I’m not sure I can think of a worse idea than government funded liability insurance.=

Actually the federal government has a long history of doing just that with the NFIP and TRIA programs.

With regards to homeowners insurance I have personal experience with how these issues have been playing out over the last few years. At the onset of the pandemic my homeowners insurer advised that they would no longer insure my home because of the age of my roof. If I did not replace the roof they would non-renew my policy. I was able to forestall that outcome by arguing that it was impossible to hire a roofer given pandemic related disruptions. It bought me a year.

I then proceeded to get quotes on a new roof. I was advised that simple repairs would extend the life of my existing roof another 5 years but the cost of a new (cedar shake) roof would be close to $75K. The contractor asked who my insurer was. When I told them they said they were particularly difficult to deal with in getting roof claims paid. He gave me the name of another large national insurer who he said always paid claims for new roofs even in the absence of significant damage. He suggested that I switch to that company and simply file a claim following the next major storm. This would be the easiest path to a “new roof.” I did not take that advice. But I did see my premiums jump from about $1,200 to north of $5K over a two year period. I ultimately moved out of that home, partly because of the looming cost of a new roof. I’ve now noticed that nearly 80% of my neighbors have since replaced their own roofs. I’m not sure if that’s with or without insurance assistance. But I can see how the issue would cause turmoil in the insurance market.

Comment by Pundent Tuesday, Apr 1, 25 @ 4:16 pm
===I’m not sure I can think of a worse idea ===

Um, it’s reality. Has been for decades.

Comment by Rich Miller Tuesday, Apr 1, 25 @ 4:19 pm
Taken from the Illinois Department of Insurance website:

=Our mission is to protect consumers by providing assistance and information, by efficiently regulating the insurance industry’s market behavior and financial solvency, and by fostering a competitive insurance marketplace.=

Again, we need some real investigation.

Comment by Mason County Tuesday, Apr 1, 25 @ 4:56 pm
Just got my policy renewal in the mail today. Homeowners policy cost up 28% over last year. No claims history.

Comment by stateandlake Tuesday, Apr 1, 25 @ 6:49 pm
- Talk to any insurance agent -

Yes, that is exactly who I trust to explain to me why my premiums have increased. A truly objective source.

Comment by Excitable Boy Tuesday, Apr 1, 25 @ 9:33 pm

Capitol Fax.com - Your Illinois News Radar

Study finds Illinois homeowners insurance premiums skyrocketed 50 percent between 2021 and 2024 (Updated)

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