September 9, 2025
Iowa home insurance rates rose 14% in 2024 amid rising tornadoes, hailstorms, and insurer exits, as the market reels from climate-driven volatility and reduced options.
Iowa's homeowners insurance landscape has transformed dramatically in recent years, with premiums increasing 14% from 2023 to 2024 and the state experiencing some of the nation's most significant rate hikes. As severe weather events become more frequent and costly, Iowa homeowners are facing a perfect storm of rising premiums, reduced coverage options, and carrier exits that demand immediate attention and strategic response.
Iowa homeowners currently pay an average of $1,828 annually for homeowners insurance with $250,000 in dwelling coverage, which places the state below the national average of $2,423. However, this apparent affordability is rapidly eroding as Iowa experienced a 14% increase in premiums from October 2023 to 2024, with the average homeowner now spending $2,416 annually.
The most concerning trend affecting Iowa's market is the systematic withdrawal of major insurance carriers. As of July 2024, four insurance providers — IMT Insurance, Secura, Celina and Pekin Insurance — no longer write policies in the state. This exodus stems directly from catastrophic weather losses, particularly the devastating impacts of the 2020 derecho.
The August 10, 2020 derecho remains a watershed moment for Iowa's insurance market. More than 200,000 claims were reported, with nearly 160,000 claims totaling more than $1.6 billion paid by November 2020. The derecho was called "the costliest severe thunderstorm event" in United States history by the National Weather Service, causing over $11 billion in damages.
The storm's financial devastation continues to influence underwriting decisions today. A consumer advocate with the Iowa Insurance Division noted that damages from that major event are "still on the books" for insurance underwriting purposes. This persistent impact explains why Iowa has become an increasingly challenging market for insurers.
Iowa's insurance market exemplifies the broader national trend of climate-driven rate increases. According to S&P Global, homeowners insurance rates increased by an average of 10.4% in 2024, with Iowa among the states experiencing increases of over 20% in 2024. This places Iowa among the fastest-rising markets in the nation.
The rate acceleration has been particularly dramatic in recent years. Data from Insurify shows that Iowa homeowners paid an average of $2,120 annually for insurance in 2023, which increased to $2,416 in 2024. This represents a nearly $300 annual increase in just one year.
Iowa's geographical position exposes it to multiple severe weather risks that drive these increases:
Tornadoes: In 2024, Iowa broke its record for most documented tornadoes in one year with 122, according to the National Weather Service. Last year, Iowa recorded 131 tornadoes, tied for the second most of any state.
Hail Damage: Hail events increased in Iowa by 133% from 2022 to 2023, according to the NOAA. This dramatic increase in hail frequency creates significant roof damage claims that impact insurer profitability.
Derechos: Parts of Iowa have had at least one derecho each year since 2020, according to the National Weather Service, creating ongoing exposure to straight-line wind damage.
Iowa's regulatory framework differs from other states in several key ways that affect coverage availability and pricing:
No FAIR Plan: Unlike many states experiencing insurance market stress, Iowa does not operate a state-run FAIR Plan for hard-to-place risks. However, the state does offer the TFPA policy for homeowners who cannot obtain traditional coverage.
Cancellation Rules: Iowa law provides specific protections for policyholders, with strict notice requirements for non-renewal. As of January 1, 2025, insurers must provide 60 days' written notice before non-renewal, including reasons for the decision.
Policy Cancellation Timeline:
Iowa homeowners face unique coverage challenges that require careful attention:
Many carriers now require separate wind/hail deductibles, often percentage-based rather than flat dollar amounts. Some insurers have responded to heightened roof damage risk by shifting from replacement value coverage to actual cash value coverage, lessening the cost burden on insurers by allowing depreciation in roof damage payouts.
Given Iowa's susceptibility to heavy rains and saturated ground conditions, water and sewer backup coverage has become essential. This coverage typically requires a separate endorsement and is not included in standard homeowners policies.
Standard homeowners policies exclude flood damage, making separate flood insurance critical for Iowa homeowners. Flooding from heavy rains in June 2024 impacted northwest Iowa and southern Minnesota, forcing evacuations and damaging thousands of homes.
Insurers increasingly scrutinize roof age and condition. Roofs over 15 years old may face actual cash value settlements rather than full replacement cost coverage, significantly impacting claim payouts.
Iowa's insurance challenges reflect broader regional trends affecting the Upper Midwest:
*Rates vary by source and coverage levels
**Estimated based on regional data
Nebraska leads with the highest increases, with Montana and Nebraska both seeing 22.1% increases in 2024, while Minnesota and Washington followed at 19.5%. This data shows Iowa's challenges are part of a broader Upper Midwest trend driven by severe weather frequency.
As traditional carriers reduce their Iowa exposure, homeowners must adapt their approach to securing coverage:
When navigating Iowa's challenging insurance landscape, working with licensed insurance professionals who understand the local market can help homeowners evaluate coverage needs and compare available options. Covered helps homeowners navigate available coverage options and understand ways to manage risk and cost, depending on their unique situation. Their warm transfer approach provides guided support from quote to claims assistance to help simplify the insurance process for homeowners dealing with today's volatile market conditions.
The Iowa insurance market faces continued pressure from multiple directions:
State climatologist Justin Glisan said extreme weather events are becoming more common because of climate change, noting "We're seeing more variability in extreme events. Extremes are more extreme".
Iowa Insurance Commissioner Doug Ommen explains that Iowa is experiencing hardening in the reinsurance market, with three years in a row of derecho damage putting the state "on the map" of risk models.
An independent insurance agent predicts Iowa will continue to see more insurers leave the state, without others willing to enter the market to replace them.
Given these market realities, Iowa homeowners should:
Iowa's homeowners insurance market reflects the new reality of climate-driven insurance challenges spreading beyond traditional high-risk coastal areas. With multiple carriers exiting the state and premiums rising faster than national averages, Iowa homeowners must navigate an increasingly complex landscape.
The combination of severe weather frequency, outdated pricing models, and reinsurance market pressures suggests continued market volatility. Success in this environment requires proactive management, working with knowledgeable insurance professionals, and maintaining realistic expectations about coverage costs and availability.
While Iowa's insurance challenges are significant, the state's market remains functional with approximately 800 insurance companies still operating in Iowa. Homeowners who understand the market dynamics and work strategically with licensed insurance professionals may still be able to find suitable protection, depending on eligibility and market availability.
This article provides general information about Iowa’s homeowners insurance market based on available industry data as of 2025. Individual circumstances vary significantly, and premium quotes, coverage options, and policy terms differ by insurance company. Consumers should consult with licensed insurance professionals for specific coverage recommendations and current pricing. Information presented should not be considered as guaranteed outcomes or personalized insurance advice.
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*Savings claim based upon averaging actual anonymized savings data for dwelling-only insurance rates paid (from July 2023 - June 2024) by customers of two of Covered’s largest mortgage industry partners across twenty-seven (27) US states. Bundles and non-dwelling insurance coverages were excluded.
† Net Promoter Score (“NPS”)® calculation averages post-purchase customer satisfaction surveys from 9/24/2024 - 2/28/2025. NPS® is a market research metric measuring customer satisfaction with a scoring calculation that incorporates both detractor and promoter customer feedback.
Quotes are presented solely for your convenience. Savings may vary. Rates are subject to change based upon the specific coverage you select and other factors that apply to your situation. CA License #0M81402, doing business as Cubbard Insurance Solutions in California.
