Letters: Home insurers in Illinois are not arbitrarily hiking rates
Rates filed by insurance companies in Illinois reflect the rising cost of claims, which is primarily driven by local natural disasters and inflation, and are not influenced by losses in other states. Illinois experienced 120 reported tornadoes in 2023 — more than any other state. These extreme weather events, combined with elevated inflation and high material costs, have dramatically increased the cost of repairing and rebuilding homes.
This reality puts enormous financial strain on everyone, including insurers. In 2024, State Farm alone incurred $1.26 in losses for every $1 in premium earned in Illinois. The National Association of Insurance Commissioners, in its most recent profitability report, revealed that homeowners' insurers in Illinois had a significant 8.3% underwriting loss over the last decade and a staggering 30.3% underwriting loss reported in 2023.
We are committed to maintaining the state's competitive market and ensuring insurers can continue to fulfill their promises to policyholders.As a State Farm customer, I'm not at all thrilled at the 27% increase in homeowners insurance beginning Aug. 15. On the surface, the Tribune Editorial Board is right to paint State Farm as the bad guy ('State Farm lowers the homeowners insurance boom on Illinoisans,' July 11). But you have to ask why State Farm is doing that.
In the past two years, ever since we had a nasty hailstorm, we have had dozens and dozens of eager young people come to our door selling their roofing services. They tell us they will inspect our roof at no cost. They tell us we have roof damage without inspecting it. One offered a drone service to use 'the latest technology' to inspect our roof. And all of them say they will submit the bill to our insurance, which most certainly will cover the cost of a new roof. Who wouldn't want a new roof at little or no cost?
Well, guess what. That cost is now being passed along to all of us. Just like the cost of genuine disasters caused by climate change is being passed along to all of us. Maybe the insurance industry does need closer scrutiny. Maybe the roofing industry does, too.
And maybe all of us should pay more attention to an offer that sounds too good to be true. Eventually, the cost will catch up with us.State Farm is raising homeowner's insurance about 27% when renewal comes up. State Farm has a duty to explain to Illinois insurance holders the facts behind its rate increase and not hide behind 'no comment.'It might be a little easier to understand the coming rate increases, except when I turn on my TV and get bombarded with commercials filled with rich athletes shilling for State Farm. Maybe the honchos at State Farm should reevaluate these costs, considering they are not hurting for customers.Regarding the news that Camp Mystic had pursued exemptions to a federal flood map: In the 1990s, I was a homeowner in the Sonoran Desert city of Tucson, Arizona. Imagine my shock when I was notified by the Federal Emergency Management Agency that my home was determined by its maps to be in a flood plain (not revealed when I purchased my home).
I appealed and paid a significant amount to have my home surveyed; the house was 1 centimeter below the level FEMA required. I subsequently paid for FEMA-mandated flood insurance on top of my homeowner's. The flood insurance was more than three times the cost of the homeowner's insurance annually.
How was this camp, caring for hundreds of children, granted multiple exemptions?Many thanks to the Tribune and its writer Lily Carey for the excellent and informative article about erosion and the efforts to contain it, along our beautiful Lake Michigan and the related diversity of lake life affected by it ('Shoring the lake,' July 13). I was born and spent the early years of my life just a few blocks from Rainbow Beach.
The lake was a major presence and attraction for my family and me.I'm a young person from Naperville who attends Metea Valley High School, and I have felt the brunt of our climate crisis. This past fall, my neighborhood saw detrimental air quality conditions from Canadian wildfires. In the hottest part of summer, searing heat waves led to widespread power outages. This isn't some distant issue. It's urgent, local and deeply personal.
I chose to intern at Accelerate Climate Solutions, a local nonprofit dedicated to advancing clean energy and climate justice. This summer, we're creating space for youth voices and creative expression to lead the conversation. On July 21, we're hosting a student panel at the Naperville Municipal Center where young climate leaders will share their lived experiences, ideas and solutions. On Aug. 2, our student-led climate art gallery 'The World We Inherit' opens in downtown Naperville, featuring original art and active demonstrations.
These projects reflect what climate leadership can look like: community-driven and grounded in justice. I've been working hard to make our community more sustainable, but this isn't a one-person job. Working together, Naperville does have the power to lead, but only if we choose to listen, act and uplift the next generation.Across the country, Americans have their heads stuck in the sand while the tide gets higher and higher. Week after week, one natural disaster after another slams people from coast to coast, and all anyone can say is that these are 'once-in-a-lifetime' events while they point fingers at someone else's supposed failure to recognize, warn and do something to prevent them.
Yes, Texas' Hill Country has flooded in the past. But it's never rained so much for so long and caused so great a flood. Sure, tornadoes are to be expected across the Central Plains. But never so many with such great force.
Of course, the summers are hot. But not with so many sustained record-breaking heat waves. And let's not forget the millions of forest acres going up in smoke. The ultimate result is people drown and lose their homes, and we just watch in amazement the national news.
When will people face the reality that we are the cause of these things and that we all must do whatever is needed to stop pumping carbon and methane into our atmosphere if there is any hope of altering the ever worsening path the entire world is on?
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Chicago Tribune
21 hours ago
- Chicago Tribune
Willie Wilson: Is Illinois' state procurement being used effectively to stabilize communities of color?
Government contracting with local businesses is a widely used tool to help stabilize communities. The effective use of procurement — sourcing, purchasing and managing goods and services a state agency needs to operate — can aid in job and wealth creation and lower crime. The state of Illinois spends billions of dollars annually on procurement. In 2013, African Americans, who represented 9.5% of the ownership of businesses, received less than 1% of the total contracts awarded by the state of Illinois. In 2015, the General Assembly and then-Gov. Bruce Rauner authorized creating the Fair Practices in Contracting Task Force. I served as chairman of the task force, and our final report in 2018 offered recommendations to make contracting more equitable. Our extensive work involved examining the contracting of every state agency. Our goal was to ensure parity in state contracting and boost businesses that have been left out. Gov. JB Pritzker in 2021 authorized creating the Illinois Commission on Equity and Inclusion. The same year, in signing legislation to expand economic opportunity, Pritzker noted that 'these four bills mark significant progress in our efforts to close the racial gaps and eliminate barriers that have for too long unfairly held Black and Brown Illinoisans back.' Illinois House Speaker Emanuel 'Chris' Welch said it was 'a monumental step toward our mission of addressing systemic racism by expanding economic access and opportunity.' The Commission on Equity and Inclusion was created in part to expand access to state contracts for minorities, women, people with disabilities and veterans. Clearly, the commission followed the work of the contracting task force. The governor could have collaborated with the task force since the goals were aligned. It is fair to ask: How has the commission improved state contracting with minority-owned firms? According to the commission's fiscal year 2024 expenditure report, much work remains to be done. A few highlights from the report: There are other examples of Illinois agencies that could do more by way of procurement with Black-owned businesses. But the most egregious example is the Department of Corrections. Consider that African Americans represent 54.5% of the total prison population in Illinois. Black people make up the majority of prisoners in Illinois, and Black businesses receive less than 0.5% of state contracts with the IDOC. Black businesses could supply clothing, food, water, cleaning supplies and other items necessary to run the prison system. An inclusive state requires accountability and removal of systemic barriers for Black businesses. In spite of affirmative action and diversity, equity and inclusion policies, disparities persist in access by Black people to capital, markets and other resources. Consequences of these disparities are high crime, inflation, poverty and double-digit unemployment in the Black community. Black-owned businesses and state governments face existential threats from the current political and legal landscape and uncertain tariff policies. However, elected leaders must not be deterred in correcting past wrongs and ensuring that all communities benefit from the use of public tax dollars through government contracting. The following are recommendations to help sustain and grow the number of Black-owned businesses: Contracting officers and elected leaders must be held accountable for their failure to improve procurement numbers for Black-owned businesses. I will convene 2,000 faith leaders and minority business owners around the state to provide recommendations regarding parity in contracting to elected leaders. Government contracting done right can have an enormous benefit to minority-owned businesses and marginalized communities. As a business owner, I reinvest my profits from contracts back into the community. Small businesses can help provide community stability. I write this commentary to make those comfortable with allowing barriers to limit state procurement contracts for Black-owned businesses uncomfortable. Willie Wilson is a business owner, philanthropist and former mayoral candidate.
Yahoo
2 days ago
- Yahoo
Major insurance company accused of illegal scheme to profit off policyholders: 'Race to the bottom'
California homeowners are suing the state's largest home insurer, claiming that the firm misled them and left them "grossly underinsured" as aggressive and unprecedented wildfires devastated much of Los Angeles, the San Francisco Chronicle reported. What's happening? On January 7, what would become a historical series of wildfires began burning in the Pacific Palisades neighborhood. Within a day, the blaze had consumed several homes. It wasn't fully extinguished until January 31, leaving a trail of destruction and fatalities in its wake. On January 9, NPR questioned whether insurance companies had "enough money" to cover the slew of upcoming claims. State Farm is the largest insurer in California, and on January 10, Newsweek covered a statement issued by the insurer. Although the language has since changed, an archived copy matched what was quoted in the article. "We are here for our customers to help begin the process of recovery," it read in part. "We want our customers to know that, when it is safe to do so, they can and should file a claim." In June, several California policyholders jointly filed suit against State Farm, alleging that the firm intentionally and "grossly" left them underinsured. Plaintiffs further alleged the company engaged in a "multifaceted illegal scheme," designed to "reap enormous illicit profits by deceptively misleading over a million homeowners," per the complaint. Through a series of pricing initiatives and other tactics, the complainants assert that State Farm created a "race to the bottom" for rates, aggressively seizing the largest share of California's market. "Lower coverage limits correspond to more attractive premium rates, but leave homeowners unwittingly exposed to serious underinsurance … This has severely undermined plaintiffs' efforts to rebuild their lives in the aftermath," attorneys for the plaintiffs wrote. Why does the California homeowners' lawsuit matter so much? While they're not technically "weather," wildfires are considered a form of extreme weather, as the extent of the damage in Los Angeles demonstrates. Do you think your home has good insulation? Definitely It's just all right It's good in some rooms Not at all Click your choice to see results and speak your mind. The Los Angeles fires were largely caused by a dry winter, exacerbated by rising temperatures and anomalous weather patterns, according to As the planet heats and seas warm, all forms of extreme weather will intensify and occur more frequently. To add insult to injury, many California homeowners experienced delayed claim processing, if they were able to secure home insurance at all. On top of that, State Farm intends to raise rates in California by 30% to 40% across the board. What's being done about the home insurance crisis? In addition to the lawsuit filed in June, homeowners in Eaton sued insurers for similar reasons in April, seeking relief through the court system. Homeowners were caught off guard by the devastating wildfires, which is why it's important to remain aware of critical climate issues and stay prepared. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the the daily Crossword
Chicago Tribune
2 days ago
- Chicago Tribune
Editorial: Gov. Pritzker and State Farm should stop throwing rhetorical bombs at each other and start negotiating
The governor of Illinois and one of the state's biggest employers are engaged in an unusually heated war of words. Shortly after news dropped last week of State Farm's eye-watering 27% average rate hike on Illinois homeowners insurance customers, Gov. JB Pritzker erupted, accusing the Bloomington-based insurance giant of pulling a fast one. 'These increases are predicated on catastrophe numbers that are entirely inconsistent with the Illinois Department of Insurance's own analysis — indicating that State Farm is shifting out-of-state costs onto the homeowners of this state,' Pritzker said in a statement. 'Hard working Illinoisans should not be paying more to protect beach houses in Florida.' In the insurance world, those are fighting words. State Farm responded with its own statement saying Pritzker had his facts wrong, and that the insurer's rate hike — as shocking as it was — reflected only its experience in Illinois, where hail and wind storms, combined with higher replacement costs, have made its homeowners business here deeply unprofitable. 'Illinois families deserve an honest conversation about insurance economics rather than political rhetoric.' So what we appear to have now are two powerful forces facing off, each effectively accusing the other of being a liar. Not ideal, to say the least. We understand the governor's frustration. The 27% increase, set to take effect Aug. 15, is the largest such one-time hike in memory in Illinois, and State Farm isn't just any old provider. The largest insurer of homes and cars in the land, State Farm is particularly dominant in its home state. For years, it's insured roughly 1 of every 3 Illinois homes. So when State Farm raises annual premiums by hundreds of dollars in one fell swoop, that could well have a negative impact on the state's economy. State Farm is that big of a player. Consumers already are struggling with inflation of all sorts. Insurance — like utility bills, which also are rising sharply this summer — isn't an avoidable cost. When insurance costs rise this much, many consumers have to tighten other parts of their budgets, which hurts businesses whose products are more discretionary. That's not to say, though, that we approve of the governor lobbing such serious accusations at State Farm without simultaneously releasing to the public the evidence backing up the rhetoric. Pritzker referenced a Department of Insurance analysis supporting his allegation. So far, no one has seen that analysis despite journalists' request for it. Likewise, the reference to 'beach houses in Florida' appears to be something of a cheap shot. In 2023, State Farm's homeowners premiums in Florida were two-thirds of its total premiums in Illinois, according to National Association of Insurance Commissioners data. State Farm's homeowners premiums in Texas were 73% more than in Illinois; they were 55% higher in California. Maybe 'cattle ranches in Texas' don't have the same ring as 'beach houses in Florida?' That stated, State Farm executives had to anticipate that a rate hike of this magnitude would provoke a political backlash. While homeowners have seen their insurance bills rise in recent years, whether they use State Farm or another carrier, few could have expected sticker shock at this level, particularly since Illinois doesn't have the same reputation for weather catastrophes as Florida, Texas or California. In California, where devastating wildfires have been coupled with major insurers' pulling back on doing business in catastrophe-prone areas, State Farm moved to raise homeowners premiums by 30% on average. A judge earlier this year agreed to allow State Farm to raise rates by 17%, and the company intends to seek the full 30% increase that it originally sought through continued negotiations with the state's insurance commissioner. That sort of compromise seems to us a reasonable solution to the standoff in Illinois. State Farm could obtain part of its planned increase — say, 15% — and then potentially impose the remainder if its Illinois results don't improve over the coming year. In return, Pritzker might soften his request for state legislation giving our insurance regulators approval authority over future rate hikes, a power they don't have now, which makes Illinois' insurance industry one of the most lightly regulated in the country. These are simply suggestions. There are other avenues to compromise. The point is that State Farm and Pritzker need each other. State Farm is one of Illinois' largest employers and a critical corporate citizen. Its future in Bloomington, a city whose economy is heavily dependent on State Farm, has been the subject of steady rumors over the past decade as the insurer has expanded operations in Texas. Conversely, Illinois' insurance department is the company's primary regulator. Part of the reason Illinois is home to two of the largest insurers in the U.S. (Allstate being the other) is that it's perceived as a good place to be based. Unlike, say, banking, insurance is regulated state by state; a company's home state takes the lead on ensuring it is operated soundly. A decent relationship between the company and state government is consequently essential. Even when conditions get this stormy, cooler heads need to prevail.
