HomeHome InsuranceSiouxland experts explain why home insurance prices have risen

Siouxland experts explain why home insurance prices have risen

SIOUX CITY, Iowa (KCAU) — Until recently, Iowa had the most tornadoes reported for the 2024 season, and the natural disasters are impacting homeowners’ monthly payments.

According to S&P Global Market Intelligence, homeowners saw an increase of 11% to their insurance premiums in 2023 after a volatile 2022.

“With so many storms and obviously this spring already being a very, very active storm season across the Midwest, there’s a lot of damage,” Josh Nichols with Hoffman Agency said. “It costs more to repair that damage than it did in previous years, so all of those challenges are really affecting the price.”

Not only is storm damage impacting home insurance prices, it’s caused some companies to leave the state of Iowa.

“Their expectation is that, regardless of the premium, that they can charge or that they would like to charge, that they will not be profitable with that premium,” Nichols said. “Rather than charging a ridiculous premium, they have just chosen to say that, you know what, we are going to fight a battle in the different states.”

In the last year, five home insurance companies have pulled out of Iowa, leaving many searching for a new company.

“We have been able to write some new customers,” Nichols said. “We’re happy about being able to write those new customers. We’re happy to be able to find a home with a carrier that’s interested in writing their business.”

While current homeowners are impacted by fewer providers and price increases, new home buyers are likely to face more hurdles to purchasing their first home.

“The bank had done their estimate for taxes and insurance and all of a sudden taxes are $5,000 a year, which was more than she had estimated,” David Pepin with United Real Estate Solutions said. “And then the insurance costs, we had to try three or four different carriers and do the absolute basic kind of insurance in order to get him under the the limit, in order to buy the home and then afterwards, then he could actually up the amount of coverage and he could buy what he really wanted.”

Before purchasing either your first home or moving to a new house, Pepin recommends talking with professionals about whether or not you’re ready.

“If you’re going to be close on your budget, I think you probably need to talk with your realtor, make sure that they really give you an idea of what the insurance is going to be for the next home,” Pepin said. “Maybe talk with somebody prior to making an offer. Call an insurance brokerage and see how much it would cost on that property so they can give you a ballpark. Certainly know how much the taxes are.”

For any questions about your insurance rates, Nichols recommends contacting your provider to find out more.

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