State Farm Hikes Rates 27%, State Farm Refuses to Hand Over Insurance Data Illinois AG Files Lawsuit
After raising rates by 27% on 1.5 million Illinois homeowners, State Farm is now refusing to show regulators the numbers. Illinois Attorney General Kwame Raoul filed a lawsuit October 14, 2025, accusing the insurance giant of violating state law by blocking access to critical consumer data. The Illinois Attorney General State Farm lawsuit alleges the company is hiding nationwide homeowner insurance information that could reveal whether Illinois residents are unfairly subsidizing claims in other states.
What’s Behind the State Farm Lawsuit?
Attorney General Raoul filed the lawsuit on behalf of Illinois Department of Insurance (IDOI) Director Ann Gillespie, following an examination launched in November 2024 into State Farm’s homeowners insurance policies and premiums. State Farm is the largest homeowners insurer in the United States, and its premiums have surged dramatically in recent years.
The IDOI is seeking zip-code level nationwide data about State Farm’s policies, including premiums collected, types of policy coverage, insurance limits, and the number of claims against policies. This granular data would help regulators determine whether Illinois homeowners are being treated fairly and if the company’s controversial rate hikes are justified.
State Farm refused to comply with Gillespie’s request, expressing concerns about violating confidentiality protections for policies on homes located outside Illinois. The company argues the data request exceeds IDOI’s legal authority.
The 27% Rate Hike That Sparked Controversy
The lawsuit didn’t emerge in a vacuum. State Farm implemented a significant rate hike in July 2025 for Illinois homeowners, raising rates by an average of 27% and requiring customers to carry a minimum 1% wind/hail deductible.
For context, that’s approximately $475-$746 more per year for the average Illinois homeowner. The rate increase drew sharp criticism from Governor J.B. Pritzker and state lawmakers.
Governor Pritzker said he was “deeply concerned by State Farm’s unfair and arbitrary insurance rate hike” and claimed the company’s actions are “antithetical to the core principles that the Illinois business community is built on”. He alleged that State Farm is shifting out-of-state costs onto Illinois homeowners, forcing “hard-working Illinoisans” to pay more to protect properties in other states.
State Farm pushed back strongly, insisting Illinois premiums are priced solely for Illinois risks—not for hurricanes, wildfires, or earthquakes in other states.
Why the Illinois Attorney General Says This Matters
“State Farm’s obstruction does not just violate the law. It prevents the Department of Insurance from obtaining information to help make sure all Illinois homeowners are being treated fairly,” Raoul said.
The Illinois Attorney General’s State Farm homeowner insurance data legal action centers on three key consumer protection concerns:
Transparency in Rate Setting
Without access to nationwide data, Illinois regulators cannot verify whether rate increases are justified or if costs from other states are being unfairly shifted to Illinois policyholders.
Market Fairness
The lawsuit underscores the depth of regulatory power held by state insurance departments—especially over companies with headquarters within their jurisdiction. State Farm’s Bloomington headquarters places it squarely under Illinois regulatory authority.
Consumer Protection
The IDOI routinely reviews business records of insurance entities operating within Illinois to guarantee consumer protection and market competitiveness. State Farm’s refusal prevents this critical oversight.
State Farm’s Defense: “This Lawsuit is Without Merit”
State Farm responded that “the Illinois Attorney General has filed a lawsuit against State Farm seeking release of nationwide data and customer information. State Farm did not violate the law. This lawsuit is without merit, and it has nothing to do with Illinois customers or the cost of their insurance”.
The insurance giant emphasized its century-long presence in Illinois and commitment to serving its policyholders. More than 21,000 State Farm agents, agent team members, and State Farm employees proudly serve millions of customers in Illinois.
According to State Farm’s position, the company has complied with all legal requirements and provided the same type of information as other insurers provide in rate filings in Illinois.
The Legal Authority Question: Can Illinois Demand Nationwide Data?
This lawsuit raises a fascinating legal question: Does the Illinois Department of Insurance have the authority to demand nationwide data from an insurer headquartered in the state?
Illinois Insurance Code Authority
Under the Illinois Insurance Code (215 ILCS 5/), the Director of Insurance has broad examination powers. Each company’s claim files for policies or certificates on Illinois risks are subject to examination and inspection by the Director of Insurance or by his duly appointed designees.
The Illinois Administrative Code (Title 50, Section 919) further establishes that companies must maintain claim data that should be accessible and retrievable for examination by the Director. These examinations can be conducted at least once every five years to evaluate financial condition and conduct.
State Farm’s Counterargument
State Farm claims that in March 2024, IDOI demanded nationwide data, and “this demand exceeds the legal authority of the Illinois Department of Insurance.” The company asked the Illinois DOI to engage in a process that would allow an independent third-party/judge to resolve this dispute nearly one year ago.
State Farm argues it has provided data about Illinois operations but refuses to turn over information about policies in other states, which it believes falls outside IDOI’s jurisdiction.
What This Means for Illinois Homeowners
If you’re one of the 1.5 million Illinois homeowners with State Farm insurance, here’s what you need to know:
Your Rates Already Went Up The rate increases went into effect July 15 for new business and August 15 for renewals. The lawsuit doesn’t change that.
Regulatory Scrutiny Continues The lawsuit represents the state’s attempt to verify whether these rate increases are justified and based solely on Illinois risks.
Potential Legislative Changes Governor Pritzker has called for legislative action during veto session to prevent insurance companies from implementing major rate hikes without adequate regulatory review.
You Have Options Illinois homeowners can shop around for coverage, though many insurers have increased rates citing similar concerns about severe weather and rising replacement costs.
The Broader Insurance Market Context
Illinois isn’t alone in facing homeowners insurance turmoil. The lawsuit occurs against a backdrop of:
Climate Risk Increases State Farm said in a rate filing that the increase is primarily driven by expected catastrophe losses. Illinois has had more hail damage than any state except Texas, with catastrophe losses exceeding the year’s catastrophe provision in 13 of the last 15 years.
Industry-Wide Rate Hikes Other major insurers like Allstate have also raised Illinois homeowners insurance rates, citing increased claim costs from tornado, hail, and wind damage repairs.
Regulatory Framework Gaps Illinois is one of the few states without “prior approval” rate regulation, meaning insurance companies can implement rate increases without proving to regulators that they’re justified. Consumer advocates are pushing for Illinois to adopt rate review requirements similar to other states.
What Happens Next in the Lawsuit?
The case is now in the Cook County Court system. Here’s what to expect:
Discovery Phase Both sides will exchange information and legal arguments about IDOI’s regulatory authority.
Potential Outcomes
- State Farm Complies: The court orders State Farm to turn over the requested data
- State Farm Wins: The court determines IDOI’s data request exceeds its authority
- Compromise: The parties reach a settlement limiting the scope of data sharing
- Appeal: The losing party appeals to a higher court, prolonging the dispute
Timeline Legal proceedings of this nature typically take months to years to resolve, especially if appeals are filed.
FAQs: Illinois Attorney General vs. State Farm
Q: Why is the Illinois AG suing State Farm instead of other insurers who raised rates?
State Farm is Illinois’ largest homeowners insurer, covering approximately one-third of all homeowners in the state. Additionally, State Farm is headquartered in Bloomington, Illinois, giving IDOI stronger jurisdictional authority. The company’s 27% rate increase—the largest in state history—also drew particular scrutiny from state officials.
Q: Will this lawsuit lower my State Farm homeowners insurance rates?
No. This lawsuit is about regulatory compliance and data transparency, not about rolling back the July 2025 rate increases. However, if the state obtains the data and finds rate increases were unjustified, it could influence future regulatory action.
Q: Can I file a complaint about my State Farm rate increase?
Yes. Illinois consumers can file complaints with the Illinois Department of Insurance Consumer Division in Chicago at 115 S. LaSalle Street, 13th Floor, Chicago, IL 60603, or in Springfield at 320 West Washington Street, Springfield, IL 62767. You can also call (866) 445-5364.
Q: What data exactly does Illinois want from State Farm?
The state wants comprehensive, nationwide, zip-code level data including: total homeowners’ premiums collected, number of policies, types of coverage provided, insurance limits, and number of claims. This granular breakdown would allow regulators to analyze whether State Farm is allocating costs fairly across different states or shifting costs to Illinois policyholders.
Q: Is State Farm breaking the law by refusing to provide data?
That’s the central question in this lawsuit. Attorney General Raoul alleges State Farm violated the Illinois Insurance Code. State Farm maintains it has complied with all legal requirements and that Illinois’ data demand exceeds IDOI’s legal authority.
Q: What consumer protection laws apply to insurance companies in Illinois?
Illinois insurance regulation is governed by the Illinois Insurance Code (215 ILCS 5/) and enforced by the Illinois Department of Insurance. The Unfair Claims Law Practices Act (215 ILCS 5/154.6) prohibits unfair claim settlement practices. However, Illinois has weaker rate regulation than many states—it doesn’t require insurers to get pre-approval for rate increases.
Q: Should I switch from State Farm to another insurer?
That’s a personal decision. Before switching, compare rates from multiple insurers, review coverage options, and consider factors like claims service reputation and financial stability. Many insurers have raised rates in Illinois, so switching doesn’t guarantee lower premiums. Consult with an independent insurance agent for personalized guidance.
Consumer Advocates Push for Stronger Regulations
The lawsuit has reinvigorated calls for stronger insurance regulation in Illinois. Abe Scarr, director of the Illinois Public Interest Research Group, argues that Illinois should adopt basic laws giving public institutions authority to review rates and determine whether increases are excessive.
“It’s not necessarily the case that it means they need to raise rates by half a billion dollars,” Scarr said. “Fundamentally, we think that rate increases of this size shouldn’t be allowed to go through without some scrutiny from public institutions.”
Currently, Illinois is one of only two states (along with Utah) that allows insurance companies to implement rate increases without prior regulatory approval. This “file-and-use” system contrasts with “prior approval” states where insurers must justify rate increases before implementing them.
Understanding Your Rights as an Illinois Insurance Consumer
Illinois law provides specific protections for insurance consumers:
Right to Transparency The Illinois Insurance Code mandates transparency in policy terms, requiring insurers to provide clear information about coverage, exclusions, and limitations.
Claims Processing Rights The Unfair Claims Practice Act requires insurers to acknowledge claims promptly, conduct thorough investigations, and explain any claim denials.
Right to File Complaints Consumers can file complaints with the Illinois Department of Insurance, which has authority to investigate and require corrective action.
Access to Information The IDOI website provides tools to check insurance company financial ratings, review complaint ratios, and access consumer education resources.
The Bottom Line: What Illinois Homeowners Need to Know
This Illinois Attorney General State Farm insurance lawsuit represents a critical battle over regulatory authority and consumer protection. At its core, the dispute asks: Can state regulators demand comprehensive data to verify that rate increases are fair and justified?
For Illinois homeowners facing rising insurance costs, this lawsuit matters because:
- Transparency is essential to ensure rate increases reflect actual Illinois risks rather than costs from other states
- Regulatory oversight protects consumers from arbitrary or unjustified premium hikes
- The outcome could influence future insurance regulation in Illinois and other states
- Data disclosure would provide unprecedented visibility into how insurers set rates
While the legal battle unfolds, Illinois homeowners should stay informed about their rights, shop for competitive rates, and engage with state lawmakers about strengthening consumer protections in the insurance marketplace.
Legal Disclaimer: This article is for educational and informational purposes only and does not constitute legal advice. The information provided is based on publicly available court documents, press releases, and news reports. For specific legal guidance about your individual situation or insurance concerns, please consult with a qualified attorney or licensed insurance professional. We are not affiliated with the Illinois Attorney General’s office, Illinois Department of Insurance, or State Farm.
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About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
Her writing blends real legal insight with plain-English explanations, helping readers stay informed and legally aware.
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