Nov
06

Rain Came Down, Now Rates Go Up

November 06, 2010

If you are a Chicago homeowner who uses State Farm, this story is going to cost you.

State Farm is raising its rates on its Illinois customer’s homeowner’s insurance policies by 5.3 percent.

An umbrella covering a houseThe rate hike is already in effect for new customers. If you are in the middle of your policy and will be renewing, your rate increase will begin on January 1.

Based in Bloomington, State Farm, Illinois’ largest insurer, covers one in every three homes in the state. It raised its rates last year by 13 percent and claims this new increase is a result of:

*Bad weather resulting in a high amount of claims

*The increase in foreclosures and vacant homes

*The high cost of building supplies

With all these variables in play, the company has reportedly been paying out $1.50 in claims for every $1 it has received in premiums.

State Farm is not the only insurance company squeezing its Chicago homeowners: Northbrook-based Allstate Corp. raised its homeowner’s rates 8 percent in July.

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