Iowa homeowners don’t face some common threats like hurricanes or earthquakes. Yet, they live in a state where home insurance rates will likely grow much faster than average in 2025, according to a new report by insurance comparison marketplace Insurify.
Insurify projects Iowans may face a 19% increase in home insurance rates this year, after the state’s 19% increase in 2024. The back-to-back increases will bring the state’s average annual cost of homeowners insurance to $3,825 by the end of the year.
The rate increases are due, in part, to the severe weather the state experiences, including strong winds, tornadoes, and hail. All these weather factors can cause significant structural damage to roofs and drive up claims.
So far, 56 severe hail events have hit Iowa in 2025, according to preliminary data from the National Weather Service (NWS). Seven events brought hail two inches or larger in diameter.
Iowa experienced 504 hail events in 2023, according to the NWS. This marked a 133% increase over 2022 activity.
Per Doug Ommen, Iowa’s insurance commissioner, five insurers stopped writing policies in the state in 2023. Severe weather and increased repair costs were the main reasons for the insurers’ withdrawal, according to Ommen.
To mitigate losses, some of Iowa’s remaining insurers have started offering actual cash value (ACV) coverage for roofs instead of replacement cost coverage.
“Replacement cost coverage replaces the item with a new product of the same value and quality,” said Buddy Parkhurst, an Insurify insurance agent. “Actual cash value is the replacement cost minus the depreciation.”
And factored depreciation leads to lower insurance policy payouts.
For example: “Say you have a roof that’s 15 years old and would cost $20,000 to replace. But the depreciation is 50%, so, with ACV, the homeowner would only receive $10,000, minus their deductible,” Parkhurst explained. “They’re on the hook for at least the remaining $10,000 [of the cost of a new roof].”
That said, homeowners can’t afford to let roof damage linger. Repairing a roof after damage is important to mitigate rate spikes. “The age and condition of the roof will be the driving factor for eligibility and pricing,” Parkhurst said.
With Iowa’s home insurance rates projected to rise to more than double the national average, legislators are proposing reform.
House Bill 499, introduced in February, aims to establish a disaster assistance program to help homeowners pay for damage “that is not covered by the homeowner’s insurance policy or by other federal or state disaster-related financial assistance.”
House Bill 957, introduced in March, aims to modify the existing Disaster Recovery Housing Assistance Program and extend eligibility to any homeowner during a declared disaster, not just homeowners enrolled in the program. It also focuses on standards for insurance adjusters to encourage impartial claims evaluations and stem fraud.
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