Homeowners across the Midwest are facing a new reality: the once-predictable cost of insuring their homes has become an ever-rising and hotly debated expense. Recent reports from both Oklahoma and Illinois reveal that soaring homeowners insurance premiums are squeezing household budgets, fueling political battles, and raising tough questions about transparency, regulation, and the future of affordable homeownership.
In Oklahoma City, a December 2025 report by Dubai-based PropFusion set off alarm bells by claiming the city now has the highest homeowner insurance rates in the United States, with a median average of $7,085. As PropFusion Chief Executive Stuart Wilkinson explained, "Oklahoma City should be one of the most affordable markets in America. Homes cost $203,000, property taxes are reasonable at $2,636 annually, and maintenance runs just over $4,000. But then you get hit with a $7,085 insurance bill because you’re in Tornado Alley. That’s more than what homeowners pay in property taxes and maintenance combined."
PropFusion’s analysis, which drew on data from NerdWallet, also pegged Tulsa’s median homeowner insurance rate at $5,250 and the statewide Oklahoma average at $6,210. Wilkinson argued, "The insurance industry has essentially made affordable homeownership impossible in OKC despite low home prices." He pointed to recurring natural disasters—especially tornadoes—as the main driver behind these staggering rates.
Yet, Oklahoma’s Insurance Commissioner Glen Mulready isn’t convinced. He’s publicly challenged the accuracy of NerdWallet’s numbers, telling reporters, "There’s been a number of folks who are looking into some of the things that NerdWallet and LendingTree are putting out there for numbers." According to the National Association of Insurance Commissioners, the median insurance cost for a $250,000 home in Oklahoma was $2,222 per year as of 2022. Even accounting for recent increases, Mulready says rates "are nowhere near the numbers NerdWallet provides."
Backing up his skepticism, Mulready cited an October 2025 study from the Atlanta Federal Reserve Bank that placed the average cost of insuring a home in Oklahoma City at $3,708 and in Tulsa at $3,084. For comparison, Dallas homeowners pay $4,056 on average, while those in hurricane-prone Tampa, Florida, and New Orleans, Louisiana, pay $3,816 and $6,348, respectively. "I know that some reporters and others have said that we have the highest in the country, but that is not true," Mulready insisted. "Do we have some of the highest rates in the country? Absolutely. We are always in the top five, but the premiums are 100% driven by claims."
Mulready attributes Oklahoma’s persistently high rates to simple math: insurance companies pay out more in claims than they collect in premiums, with an average loss ratio of 110%. "For every $100 that they have taken in, they’ve paid out $110 in claims," he said. The state’s ongoing battles with tornadoes and other severe weather events mean insurers are constantly on the hook for major payouts, making profitability elusive.
Still, the pain for Oklahoma homeowners is real. Multiple news outlets have reported on dramatic rate increases and the growing challenge of keeping up with annual costs. State legislators launched a study into the issue in October 2025, while Oklahoma Attorney and Gubernatorial Candidate Gentner Drummond has openly questioned Commissioner Mulready’s stewardship and cast doubt on whether weather events and market forces are the only culprits.
Illinois, meanwhile, is grappling with its own insurance rate crisis—one that’s unfolding in a very public, very political arena. As of December 27, 2025, Allstate has filed to raise homeowners insurance rates statewide by an average of 8.8% effective February 24, 2026. The move will affect more than 209,000 policyholders, with increases ranging from 4.9% to 10.4%. This comes on the heels of State Farm’s eye-popping 27% average rate hike, implemented in the summer of 2025 for nearly 1.5 million customers.
Both Allstate and State Farm have pointed to severe weather events, inflation, and surging rebuilding costs as the reasons for these increases. Allstate told the Chicago Sun-Times that Illinois pricing "reflects local risk and rebuilding expenses." State Farm, for its part, has argued that its homeowners business in Illinois has been unprofitable, noting that the state had more hail damage claims than any state except Texas in 2024, totaling $638 million.
But the real flashpoint in Illinois isn’t just the size of the increases, it’s the state’s limited power to regulate them. According to ABC7 Chicago, Illinois is the only state without a law prohibiting "excessive, inadequate or discriminatory" premiums and the only one lacking authority to review rates for homeowners or auto insurance. This regulatory gap has intensified debates in Springfield, with consumer advocates and some lawmakers calling for tougher oversight and transparency.
In October 2025, Illinois Attorney General Kwame Raoul filed a lawsuit seeking to force State Farm to provide ZIP-code-level data on premiums, coverage, and claims nationwide—a move he described as essential for protecting consumers and understanding market pressures. "Refusal to provide the data prevents regulators from obtaining information necessary to oversee the market," Raoul’s office stated.
The numbers underscore the urgency: from 2021 to 2024, Illinois homeowners insurance premiums rose by 50%, the second-highest jump in the nation according to the Consumer Federation of America. For a typical $350,000 replacement value policy, premiums climbed from $1,968 to $2,942. Consumer advocates warn these trends don’t just squeeze current owners—they also threaten to reshape the housing market, making it harder for would-be buyers already struggling with high mortgage rates and property taxes.
Industry groups, however, say the increases are justified. Mark Friedlander, spokesperson for the Insurance Information Institute, pushed back on calls for heavy regulation, arguing that increases "reflect real, rising costs tied to disasters and inflationary pressures." Similarly, Dave Snyder of the American Property Casualty Insurance Association pointed to underwriting losses and the impact of severe weather.
Consumer advocates like Abe Scarr of Illinois PIRG remain unconvinced. Calling Allstate’s filing "excessive," Scarr cited the company’s $3.7 billion net income in Q3 2025 and warned that rate hikes by two dominant carriers can quickly ripple through the market, impacting hundreds of thousands of households. Illinois PIRG noted that Allstate’s December 2025 filing alone would impact nearly 300,000 policyholders and total more than $58 million.
Lawmakers have floated various proposals, such as prior approval requirements for rate increases, caps, and public comment periods. But none have gained enough traction to pass. Editorial voices, like those at the Chicago Tribune, have urged a cautious approach, warning that aggressive rate controls could reduce competition or prompt insurers to leave the market—potentially making coverage even harder to obtain.
For homeowners in both states, the advice is practical: shop around, compare deductibles, look for discounts, and make homes more disaster-resistant. In Illinois, those denied coverage can turn to the Illinois FAIR Plan, a last-resort option for basic property insurance.
Ultimately, the debate over homeowners insurance is about more than just numbers. It’s about the delicate balance between affordability, transparency, and the need to keep the insurance market viable—especially as severe weather and economic pressures show no sign of letting up.
