Iowa has one of the country’s least stable home insurance markets, with home insurance rates nearly doubling since 2020 and insurers paying more in claims than they collect in revenue from premiums, a new report by LendingTree shows.

Between 2020 and 2025 rates for home insurance in Iowa increased 96%, the second highest in the U.S., the report shows. Home insurance rates in Colorado increased 100.8%, the highest in the country.

Iowa’s insurance loss ratio – the amount an insurance company pays claims compared to the income it receives from premiums – between 2020 and 2024 was 118%, the second highest in the country behind Louisiana, the report said.

Rising construction costs and inflation have played a role in Iowa’s increasing home insurance costs, said Rob Bhatt, LendingTree home insurance expert and licensed insurance agent. Just as important has been the increase in severe natural disasters in the state, he said.

“There have been derechos and several other storms that have ravaged Iowa,” Bhatt said. “That has meant insurance companies have had to repair and rebuild more homes and because of inflation, it has cost more to rebuild them.”

Between 2020 and 2024, Iowa experienced 27 severe weather disaster events, including 19 severe storms and two floods, according to a report by the National Centers for Environmental Information. The weather events caused between $10 billion and $20 billion in damages in the state.

The severe storms included the Aug. 10, 2020 derecho, that produced straight-line winds of up to 140 miles per hour in some parts of Iowa and caused over $11 billion in damages to the state. Less severe derechos also occurred in Iowa in December 2021, May 2022, June 2023 and July 2024, according to the National Weather Service.

In 2024, Iowa experienced a record 125 tornado touchdowns including an EF-4 tornado on May 21 that slammed Greenfield, killing five people, damaging or destroying 153 homes and causing more than $35 million in damage.

Home insurance rates rose an average of 14.6% between 2024 and 2025, a three-year low, data from LendingTree shows. (LendingTree is a popular website that helps consumers compare loan options by connecting them with multiple lenders for things like home mortgages and vehicle and personal loans.)

The smaller increase in the average rate for home insurance premiums “may be a sign that rates are starting to stabilize,” Bhatt said. “Insurers may have reached a point where they’ve gained enough from premiums that they can cover their losses and with any luck, they might start being able to reduce their rates to try and win back some customers.” 

Skyrocketing homeowners’ insurance costs are prompting some real estate agents to add a new contingency to purchase agreements for homes, making offers subject to the home’s insurability and buyers’ ability to afford the premiums.

“That’s something new for our community to have to be concerned with,” Scott Steelman said at a recent Business Record Project515 discussion on the housing market. Steelman, a real estate agent with Iowa Realty Co., is president of Des Moines Area Association of Realtors. “We don’t want to put our clients in a position where, when all the details come together, they can’t make” the purchase work financially.

The LendingTree report also showed that 13.5% of homes in Iowa are uninsured and that an average of 3.6% of household incomes are spent on homeowners’ insurance. 

Bhatt said consumers should regularly compare home insurance premiums of various companies to see if better rates are available. Money can also be saved by increasing deductibles, he said.

Some states and cities have begun implementing higher building standards to help minimize damage from severe storm events, Bhatt said. “Homeowners can do some of these things, too, like strengthening roofs and installing wind-resistant windows. … Anytime you can prevent or reduce damage also reduces the impacts on the insurance industry.”