For many of us, whether we’re homeowners or hope to be someday, having a house we can call our own is part of the American dream. However, having a home also commands many costs and responsibilities, not the least of which is homeowners insurance. Many Illinois homeowners, like homeowners across the country, have faced daunting premium hikes and changing coverage options in recent years. Here’s what you need to know about making the most of your homeowner’s insurance and saving money doing it.  

The realities of home insurance in Illinois 

Unfortunately for Illinois residents, homeowners insurance is already expensive compared to the national average, even before considering the current (and future) rate hikes. According to Kristine Lee at The Zebra, Illinois homeowners insurance is $1760 a year ($147 a month), 16% more expensive than the national average of $1515. What you end up paying for your home insurance depends on several factors, including which company you choose — Allstate, for example, might cost you as little as $1127 a year, while Travelers could cost you as much as $5212! 

This number hasn’t been static, either. From 2019 to 2023, rates have climbed about 4% annually, which is not great news for families already struggling financially. Why are rates so high and poised to go even higher? Primarily, the massive costs incurred by increasing natural disasters such as floods and storms. Massive payouts have become so common that insurance companies have had to raise rates to stay profitable. 

How is this relevant to Illinois residents? Anyone who’s experienced the record-breaking heat in Chicago over the past couple of years can tell you. But extreme heat is only part of the problem — the Argonne National Laboratory says that extreme cold spells in Chicago may become the norm rather than the exception, and the heavy rains that caused excessive flooding last July may be back with a vengeance again this summer. 

Other reasons for rising premiums include the increased cost of materials and labor in the wake of worldwide supply chain issues, as well as the more significant expense involved in insuring high-tech appliances and electronics. 

What your insurance covers: essentials and exclusions 

Now let’s talk a little about what your homeowners insurance will and will not cover. Your average homeowner’s insurance policy covers what are called “common perils,” typically fire, theft, vandalism, and liability protection against accidents occurring on the property. Most homeowners insurance will not cover floods or earthquakes, and these will require separate coverage. Illinois homeowners might consider adding endorsements or riders to supplement their coverage, such as insurance against floods, sewer backups, identity theft, and more. 

Two more things Illinois homeowners should be aware of are tort immunity and municipal liability. In short, tort immunity provides protection to municipalities from certain kinds of lawsuits, meaning that if your property is damaged during work being performed by the municipality (such as road work, water mains, etc), the municipality might not necessarily be held liable. This could severely limit your recourse if your property suffers damage done by the municipality, so it’s essential to seek out an appropriate legal council should that happen. 

What else influences insurance rates? 

Of course, the insurance company you choose isn’t the only factor that can influence what you pay in premiums. Your zip code can play a significant role, as it determines other factors, such as crime rates, property values, proximity to specific services like fire and ambulance, and so on. If you undertake home renovations, particularly if they’re high-tech renovations like smart home technology, this could either raise or lower your premiums, depending (more on that below). 

Reducing your insurance rates 

Rising insurance rates are a growing challenge for homeowners nationwide, but there are some valuable strategies for bringing rates down — or at least mitigating their rise. 

• Comparing home insurance quotes from multiple insurers can be a great way to optimize your coverage and the price you pay. As seen above, premiums can vary dramatically from one company to the next. 
• Installing smart home technology such as thermostats, water and C02 leak detectors, smart doorbells, and other equipment can lower the chance of significant damage to your home, thus bringing down your risk of a claim. The same goes for burglar alarms, automated lights, and other home safety equipment. 
• Renovating your house with green, sustainable, and/or fire-resistant materials is another way you could lower your insurance payments. Inquire with your insurer to see what options you have. 
• If you have home and auto insurance with the same company, bundling them together will often earn you a discount. 

Can’t afford homeowners insurance? 

Even if you’re conscientious about saving money and bringing your insurance premiums down as much as you can, it’s possible you may still find it challenging to afford traditional homeowners insurance. Fortunately, you may still have some options: the FAIR (Fair Access to Insurance Requirements) program was specifically implemented to provide coverage to homeowners who are either deemed high-risk or are unable to afford insurance through traditional channels. If you’re facing difficulty making ends meet, look into FAIR and see if you qualify for aid under the program.