Home Insurance in Iowa

WRITTEN BY: Amelia Ciffone

UPDATED: MAY 24, 2022 | 3 MIN READ

With Americans spending more time than ever inside their homes, it only makes sense to want to protect that home – whether from fire, flood, for theft. Iowa is an affordable state for home insurance, likely influenced in part by its low property crime rates and inexpensive housing. Though standard Iowa insurance provides protection from its frequent tornadoes, there are potential gaps in the availability of flood insurance, which Iowa’s government has attempted to address through its regulation of disaster relief FEMA programs. To find the best Iowa home insurance, it’s a good idea to have an understanding of what average policies in the state are like.

  • Fun fact: The world’s first electronic digital computer was built and operated by researchers at Iowa State University in the 1930’s

Average Rates in Iowa

Home insurance in Iowa is comparatively cheap. Its average home premiums of $964 fall several hundred dollars below the national average of $1,211, and its premiums are cheaper than 70% of the states in the nation. This puts Iowa in good company – some other cheaper states for home insurance include Alaska (average premiums $959) and New Hampshire (average premiums $972).

Iowa renter’s insurance offers even more savings. Iowa is among the top 5 cheapest states in the nation for renter’s insurance, with average premiums of $144. Similarly priced states for renter’s insurance include Nebraska (average premiums $143), and Montana (average premiums $146).

Iowa Legal Insurance Requirements

Although there’s no law against not having home insurance, if you have a mortgage in Iowa, they will require home insurance from you – if you can’t find insurance yourself voluntarily or don’t qualify for standard insurance, the mortgage lender can force you into a home insurance plan that may be more expensive.

According to the Iowa Insurance Division, the following is covered by standard Iowa home insurance:

  • Coverage A: Damage to house. The face amount of your policy is the maximum payout you get if your house is completely destroyed.
  • Coverage B: Other structures. This insures structures such as detached garages, shed, buildings, and fencing which aren’t attached to your main dwelling
  • Coverage C: Personal Property, which includes furniture and necessary appliances, as well as clothing. However, luxury items like antiques and furniture receive very limited insurance you may want to purchase additional insurance or endorsements for.
  • Coverage D: Additional Living Expense. Up to a certain limit, the policy will pay for hotel stays or other expenses to maintain your normal standard of living should a a destructive event covered by your policy prevent you from living within your home.
  • Coverage E: Personal Liability. This is insurance against legal fees and claims you may face due to incidents occurring on property that you own or rent (not including auto and boat accidents)
  • Coverage F: Medical Expense. While this coverage doesn’t apply if you, a family, or a pet is injured, it does help pay for medical bills of guests who are injured on your property, whether or not there’s a lawsuit involved.

But what kind of “damages” are covered by insurance? Iowa policies have a standard list of “perils” or damaging incidents that cover events ranging from fires and explosions to theft, to the weight of snow or ice on your roof. Your policy will have more detailed information on the exact perils you’re insured for, but in Iowa there are a few important exceptions that are NOT covered by standard home insurance. These include:

  • Flood (not including damage from leaky or burst pipes)
  • Earthquakes
  • Mold
  • Infestations, such as from rodents or termites

Common Risk Factors in Iowa

Iowa’s Department of Homeland Security and Emergency Management identifies some of the top risks to Iowa properties from natural disasters. Among these are tornadoes, high winds, heavy rains, and flooding. 

  • Tornadoes and High Winds. Particularly in northern Iowa, which is considered a part of “Tornado Alley,” dwellings and other structures risk destruction from severe winds. Luckily, in 2019 most tornadoes were less severe, the majority of the 54 tornadoes being between 65-110 mph, as recorded by the National Weather Service. There were only two tornadoes of EF3, with winds of 136-165 mph. Wind damage is insured by standard home insurance, but you may consider additional coverage or endorsements depending on your location.
  • Heavy Rains and Flooding As with most areas within the inland United States, damages from annual heavy rains are often underestimated by homeowners. In 2008, about $10 billion in damages were caused by a single flood, affecting over 40,000 people. Although flood insurance is not offered in standard home insurance packages, if you’re one of Iowa’s 650 participating communities, you can obtain it through the National Flood Insurance Program (NFIP). After the disastrous 2008 flood, in 2009 Iowa adopted a law that made receiving disaster relief from public FEMA programs dependent on the community participating in NFIP. This was meant to incentivize communities to participate, but there still may be gaps in flood insurance coverage depending on where you live.

Insurance Demographics/Statistics in Iowa

When insurance companies set the prices of their premiums, they tend to consider two sets of information: how likely is the homeowner to make an insurance claim, and how much would it cost to fix damages to the property once a claim is made? To get an idea of some factors affecting your home insurance, you can consider the following:

Your Home’s Value

The standard by which all of your home insurance is measured lies in the value of your home. This is calculated most often as replacement cost, or how much money it would take to rebuild your home using similar materials and with current labor costs. Another means of assessing a home’s value most often used for older homes is actual cash value, which is for the amount it would take to buy the home after depreciation has affected its value.

The average home value of Iowa based on information pulled from Zillow is $154,727 – far cheaper than the national average of $248,857. This may decrease overall insurance premium prices, although it’s important to note that the market value of a home isn’t an exact corollary to a home’s value as calculated by home insurance. Part of the market value of a home has to do with the value of the land attached to it, which does not factor into the replacement cost of a home.

Local Crime Rates

Standard home insurance protects homes and possessions from property crime like theft and vandalism. So, in areas with higher property crime rates, insurance prices may increase to offset the risk of a homeowner making an insurance claim. In 2018, the FBI’s Uniform Crime Reporting Program reported on the property crime rates of all 50 states. After subtracting car theft rates from the totals, Iowa experienced a property crime rate of 1.54%, which is below the national property crime rate of 1.97%

Your Income and Education

As a general rule, people with good incomes, credit, and a college education are part of a population considered “lower risk” for filing insurance claims in general. Regardless, it’s hard to deny that a higher income makes paying for home insurance a little bit easier to fit into the monthly budget. In Iowa, the average 2018 household income was $59,955, falling below the national average of $63,179. And, among the population of people aged 25 and over, 28.2% had obtained a bachelor’s degree or higher, compared to 32.06% nationally.

Where To Purchase Home Insurance in Iowa

So, how do you find the ideal Iowa home insurance for you? Nothing will beat good research – comparing the prices and policies of many different companies, with your particular needs in mind. Agilerates.com can be your research buddy, giving you accurate quotes by a comprehensive list of insurers in your area. Even if you aren’t a new homeowner, every year as your home insurance policy renews you have the chance to switch plans to get the most competitive prices for the best coverage. According to the Pulse Whitepaper from iii.org, only 44% of homeowners compare prices of different insurers at renewal time, and only 17% do so online. That means more than half of all homeowners are leaving money on the table at renewal time. Use Agilerates.com online form to get matched with a local agent, get free quotes, and shop around!