Homeowners Insurance in Iowa

Living in the Midwest exposes residents to a decent risk of tornadoes, earthquakes, and wildfires. Iowa is situated smack dab in the middle of the Midwest, putting that state in danger of these and other disasters that damage and destroy property. Since 1953, Iowa has had 63 federally declared natural disasters, and the rate of disaster per 1 million people is 19.6.

Along with major weather events, Iowa residents also file home insurance claims for wind and hail damage, fire, lightning, water, and damage from frozen/burst pipes, theft, and other types of property damage.

No U.S. state requires homeowners insurance, but they all stress the need for it to be prepared for the unexpected. If you borrow money to buy your home in Iowa, your lender will require that you purchase homeowners insurance and keep it until the loan is paid off. They will also dictate the levels of coverage you need, which may be more than you would choose for yourself.

The national average cost of homeowners insurance is $2,500/year or $209/month. Iowa's average home insurance rate is $2,654/year for $300,000 of dwelling coverage.

Only certain insurance providers choose to operate in specific states. They also offer customized insurance options to homeowners based on the particular risks associated with the region. In Iowa, the coverage options available include:

In places like Iowa, where there are frequent violent storms, you may also want to consider an umbrella policy or flood insurance.

FEMA (Federal Emergency Management Agency) manages the National Flood Insurance Program (NFIP) through a network of 50 providers across the U.S.

Since most homeowners insurance does not cover floods, this supplemental coverage can repair damage and replace items after a flood. Depending on the options you choose, it can cover the building and/or your personal belongings. This program is available to homeowners, renters, and businesses. Learn more about the program on FEMA's website.

Climate risk and natural disasters are the number one factor impacting the homeowners insurance market and home values. In some states like California, Florida, and Louisiana, where there have been multiple billion-dollar disasters, insurance providers have stopped offering coverage, making it impossible for property owners to protect their homes. Over the past five years, home insurance has increased by an average of 34%, and in some places, it has increased by as much as 60%. Home insurance has increased by 34.7% in Iowa from 2018 to 2023.

Unfortunately, Iowa experiences some of the more expensive and destructive weather patterns, such as tornadoes, earthquakes, and wildfires. In 2023, Iowa had 73 tornadoes, destroying property and threatening lives. However, Iowa had only seven wildfires in 2022, destroying only 288 acres. From 1980 to 2024, Iowa had 80 billion-dollar disasters. From 2015 to 2019, Iowa insurers experienced $476,700,600 in losses from catastrophic events. Iowa appears on the list of states with the most insurance claims from hail, and from 2017 to 2019, insurance companies paid out $113,139 to cover hail damage.

Homeowners' insurance premiums continuously increase, and property owners are desperate to find ways to save. The things that impact homeowners insurance the most are:

Other things that affect your premiums are the condition of your home, attractive nuisances (pools, hot tubs, trampolines), and the cost of materials and labor in your local area.

Due to the high risk of tornadoes, earthquakes, and wildfires, the best way to save money on your insurance is to fortify your home with fire-resistant shingles and siding. Install shatter-proof windows, hurricane shutters, sprinklers, and other fire safety features. Other ways to save include:

• Raise Your Deductible
• Bundle Your Policies with the Same Carrier
• Ask for Recommendations
• Shop Around for a Provider
• Get Rid of High-Risk Items
• Skip Small Claims
• Ask for Discounts

Like other insurance policies, home insurance protects your home against covered perils. If a disaster occurs, the insurance company will pay to replace or repair your home. Some of the things that are considered qualifying events are fire, falling trees, lightning, hail, wind, smoke, theft, and vandalism. Most policies also include liability, personal property, medical payments, and ALE coverage.

Obtaining a policy is fairly straightforward. You can find an insurance carrier and apply online, via phone, or by visiting a local agent. You must choose your levels of coverage and pay the first year in advance. After that, you can pay monthly through your escrow payments or once a year.

Some common discounts offered by home insurance providers include:

• Claims-Free Discount: If you go claims-free for many years, you may qualify for a discount.
• Safety Discounts: Install a security system, smoke alarms, sprinklers, and other safety features, and you can save on your home insurance.
• Bundling Discount: If you bundle your car and home insurance with the same provider, they often give you a discount.
• Military Discount: Most carriers offer military personnel or vets discounts.
• Senior Discount: Many insurers also offer discounts to seniors.
• Teacher/Firefighter Discount: Some service-related professions, such as teachers and firefighters, also earn discounts.
• New Home Buyer Discount: New home buyer discounts are also typical among home insurance providers.

Common Rates Offer by Homeowners Insurance Firms

New construction homes cost less to insure than older homes, sometimes as much as 40% less. Iowa insurance firms offer an average rate of $1,828 to new homeowners. However, your individual rates will vary based on your credit score, age, claims history, and other factors.

Top 10 Home Insurance Firms in Iowa and Average New Home Savings

Home renovations can improve your living space and make your house more comfortable, but they can also impact your home insurance coverage and rates. Some upgrades lower your rates, and others increase them. Some cancel each other out and don't change your rates at all.

Home Renovations that Increase Your Rates

Some home renovations that increase your rates include:

• Build a Pool: Building a pool could add fun for your whole family and allow you to take advantage of the outdoors, but it could also drastically increase your rates because it ups your risk.
• Upgrading Kitchen or Bath: They say renovating the bath or kitchen doubles your investment, but it also means more insurance coverage and higher rates, especially if you use luxury materials.
• Finishing the Basement: Adding space is a good thing, but it can also increase your premiums.

Home Renovations that Lower Your Rates

Some home renovations that decrease your rates include:

• Replacing Your Roof: Replacing your roof with storm-resistant materials could significantly reduce your risk and your premiums as a result.
• Installing Security: Installing a professional security system with door and window sensors, monitoring cameras, and alarms could also save you money, especially if you live in a high-crime area.
• Installing Water Shut-Off Devices: Water damage is costly for homeowners and insurers. Installing automatic water shut-off devices and alarms could save your home from damage and save you money on your insurance.

Some renovations, like solar panels or high-end siding, could increase and decrease your rates, creating a zero net effect on your premiums.

Home insurance pays for repairs only after a qualifying event, not regular maintenance or wear and tear upgrades. If you choose to upgrade things due to style or age, you must pay for those yourself. During renovations, home insurance covers you for injuries and theft but not damage caused by the renovation. You can purchase special contractors' or builders' risk insurance to protect yourself against those things.

Since your home insurance will change after a renovation, it's better to discuss it with your insurance agent before any work begins. Ask questions about how the renovation will affect your rates and your coverage.

Renters insurance is a policy designed to protect those who rent living spaces instead of purchasing. Its primary focus is to protect your belongings, but it also includes liability, medical payments, and ALE coverage. Renters insurance does not include dwelling coverage and will not pay for any structural damage. That must be covered under the owner's policy. Some things covered under renters insurance are:

Some renters insurance covered perils include:

Typically, renters insurance is priced according to your location, carrier, deductible, and coverage levels. The three main factors that affect renters insurance are:

The average renters insurance rate in Iowa is $9.34/month, which is extremely low. However, your rate will vary based on your carrier, age, credit score, and other factors.

Anyone who owns a condo should also have homeowners insurance or HO-6 insurance. This policy is special insurance designed specifically for condo owners. It differs from homeowners in that the dwelling coverage only applies to the condo's interior, nothing outside. The structure of the building is covered by the condo association's master policy, which will replace the building and restore it to its original condition (when it was first built) after a covered event. Since most condo owners upgrade things like flooring, appliances, cabinets, countertops, and fixtures, they need insurance to cover those upgrades and restore them to their current condition. Condo insurance also includes personal property, liability, medical payments, loss of use, and loss assessment coverage.

The biggest difference between condo and renters insurance is that condo insurance includes some dwelling coverage (interior only), and the liability portion kicks in only if the person is hurt within the condo, not outside. Some of the things covered by condo insurance are:

• Furniture
• Fixtures
• Clothing
• Appliances
• Wiring
• Plumbing
• Interior Walls
• Flooring
• Countertops
• Cabinets
• All Other Personal Possessions

Like renters insurance, condo insurance has limits; if you have many expensive items, they may not be covered. Typical condo owners in Iowa pay about $43/month for condo insurance. However, it could be as high as $61/month in some riskier areas.

Some ways you can save on condo insurance are:

• Shop Around and Compare Prices
• Bundle Your Home and Auto Together
• Increase Your Deductible
• Look for Other Discounts
• Upgrade Your Home with a Security System
• Keep Your Credit Score High
• Avoid Small Claims

Iowa is one state hit hard in the insurance industry. Because of multiple severe storms over the past four years, the homeowners insurance market has sustained considerable losses. As a result, insurers are limiting their coverage, and some are even pulling out of the state altogether. These trends make it difficult for residents to find coverage and decrease provider competition.

Iowa is subject to catastrophic storms and tornadoes destroying property and incurring claims. The main reason for Iowa's devastating home insurance market is due to many billion-dollar disasters and frequent storms. Property owners may find it even more difficult to get coverage in the coming years if it continues.

Since no federal agency regulates home insurance, it is left up to the state. Each state has a governing office that monitors insurance providers, investigates complaints, and sanctions guilty firms. That agency in Iowa is the Division of Insurance, located at 330 Maple Street, Des Moines, IA 50319.