Part 1 of a series: Iowa home insurance driven up by climate change, inflation

REGIONAL—Amy Logan runs a day care out of her home in Primghar. This year, her home insurance rates were set to triple.

“I pay like $200 now, and they were upping mine to over $700 a month,” the 56-year-old Logan said. “That’s crazy, isn’t it?”

Logan has lived in the same home since 1989, and despite paying her monthly premiums for decades, she only remembers filing one small claim.

“So, in 30-some years, I’ve had probably one claim — when the bathroom upstairs leaked through the ceiling,” Logan said.

Logan decided to shop the market — and she got lucky. Unlike some Iowa homeowners, who have had to absorb higher premiums or accept less coverage, Logan found a cheaper plan through a different carrier. Her new plan costs about the same as her previous plan — before its monthly premiums were set to triple — and the coverage is the same, if not better.

Not all Iowa homeowners have been so fortunate. Homeowners across the state have faced soaring insurance premiums, narrowed coverage and higher deductibles as insurers respond to mounting losses driven by severe weather, rising home values and the escalating cost of rebuilding.

Larry Smit, an agent at Perspective Insurance, has watched the market fluctuate during his years working out of the company’s Sheldon office.

“I have been in the business for 28 years, and I’ve seen the ups and downs of the market,” Smit said. “What we’ve seen in the last five years is probably the most dramatic of all the years I’ve been in the business.”

Iowa ranked second in the nation among states with the biggest surges in insurance premiums between 2020 and 2024. During those years, insurance rates for the average Iowa homeowner nearly doubled. In 2024, Iowa’s home insurance market was identified as one of the least stable in the nation, placing it in the throes of a “mounting insurance crisis,” according to a report by Insurify, an insurance-comparison marketplace.

Rate hikes for customers reflect unprecedented claims payouts by insurance companies caught in the crucible of severe weather events and high construction costs. Between 2020 and 2025, insurance companies in Iowa operated at a loss, paying out more for claims than they collected in premiums. Some companies have responded by pulling out of the Iowa insurance market entirely, leaving fewer options for homeowners and a less competitive marketplace.

“We’re finding that companies aren’t writing policies like they used to,” said Jessica Mulder, chief operations officer for Perspective Insurance. “We have certain carriers who won’t write a homeowner’s policy in this area or are canceling all of their policies in this area.”

That has left some Iowans scrambling for new coverage. Mulder encourages her clients to regularly review their policies, but she counsels caution when considering a switch to a new carrier.

“You have to be careful if you want to move to a new carrier to save premium,” Mulder said. “That carrier might have a low rate, but then they say, ‘Oh, at the end of this year, at your renewal, we’re not going to write it anymore,’ and you have to try and find another carrier.”

Why are rates rising?

Insurance industry professionals consistently point to several factors behind the recent rate hikes: ongoing inflation, rising home values, increased labor and construction costs, and more frequent and costly severe weather events across the state.

Climbing home values — and the higher replacement costs that come with them — are among the reasons insurance rates have soared, according to Smit.

“COVID caused us really, really high inflation, and so we talk about building materials, labor costs,” Smit said. “A home that used to cost $250,000-$300,000 to build today is probably $450,000-$550,000, or maybe even a little more.”

Brad Van Bruggen, co-owner of Van Bruggen-Wesselink, an insurance agency in Sioux Center, said he has watched home values climb in Sioux Center — and higher insurance valuations have followed.

“What used to be a $300,000 house is now $400,000,” he said. “So, insurance is going up, but you’re getting more for what you’re paying for as well.”

Insurance companies set rates designed to keep them competitive in the marketplace and in step with government regulations while remaining solvent. But setting rates requires a complex probability calculation and involves inherently uncertain factors.

For example, predicting replacement costs for damaged properties can’t be reduced to a simple mathematical formula. Actual rebuilding costs are subject to volatility in material costs, labor shortages and supply-chain issues, and for that reason, many homes may be underinsured.

Predicting the effect of climate change on future weather-related losses requires a further step into an uncertain future. In an era of accelerating climate change, historical weather patterns are no longer reliable indicators of future risk.

Iowa was once considered a “climate haven,” largely invulnerable to the large-scale disasters that plague states like Florida, Louisiana and California. But climate models used to set insurance rates are shifting to account for increasingly volatile weather patterns in Iowa and across the Midwest.

Smit said the derecho that swept across Iowa in 2020 is a case in point, but the Midwest has seen a broad uptick in severe convective storms in recent years.

“In The Des Moines Register, there was an article probably a year ago, maybe two already, that said Iowa was the new Florida,” Smit said. “And that’s because of all the disasters that happened in Iowa.”

According to the National Weather Service, the 2020 derecho that swept across Iowa and other Midwestern states “was the costliest severe thunderstorm event in United States history.” The storms brought heavy hail and hurricane-force winds, causing more than $11 billion in damages. Another derecho in July hit N’West Iowa particularly hard, felling trees, ripping off siding and even blowing the roof off a home in Sioux Center.

As time goes on, and insurance companies continue to pay out huge sums in the wake of severe weather events, those costs are passed along to homeowners in the form of higher premiums. But customers are not only facing higher premiums — they are often paying more for plans with narrower coverage and higher deductibles.

“We have seen substantial rate increases,” Mulder said. “I’ll just speak for myself. My policy took a 25 percent rate increase, and the next year took another 20 percent rate increase — so, quite a big increase, actually — but it’s also a reduced coverage.”

Some insurance companies are pairing rate increases with new restrictions on policies. In the past, Mulder said, insurers might reassess the value and condition of a home every five years.

“Now they’re doing it every year, with different technology, and saying, ‘We see x — you need to fix this, or we’re not renewing you,’” Mulder said.

Insurance companies increasingly use aerial imagery — including drone footage — to reassess the condition and value of insured homes. The practice allows them to identify potential risks, such as aging roofs, overhanging trees or unreported structures like pools or sheds.

“The big one is carriers are starting to look at the roof age. They want to know, ‘Was your roof replaced in the last 10 to 15 years?’” Mulder said. “They are putting stipulations on coverage, like, ‘We’re only going to take homes that were new roofs 10 years ago.’”

Many factors are compounding at once, Mulder said, including the shrinking number of carriers in Iowa’s insurance market.

“Not only are the premiums going up, the amount of carriers is going down and the restrictions are going up,” she said.

Deductibles have also risen sharply.

“When I first started here, it was a $500 deductible. Then it went to $1,000 deductible. Now, a normal is $2,500,” Mulder said.

Smit and Mulder said Perspective Insurance has hired additional staff to help clients navigate the rapidly shifting market. Their own workload also has grown as they encourage clients to review their policies more frequently and shop for new policies when coverage becomes inadequate or unaffordable.

The good news, according to both Smit and Van Bruggen, is that the pace of rate increases appears to be slowing. The market heading into 2026 seems to be “softening,” Smit said, and that means premiums will likely stabilize and competition among carriers will likely increase.

“We have a sense of direction going forward,” he said. “We won’t see the dramatic changes that we did in the prior couple years.

“With insurance, you always have to look at the big picture,” he added. “And you have to look back and ask, ‘Why? Why did this happen?’ Well, it didn’t just happen, right? It’s been building — and people are just feeling it in a particular way right now, unfortunately.”