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Homeowner’s Insurance Premiums in Iowa

Purchasing your first home is a wonderful feeling; purchasing homeowners insurance for it, however, is not. But you’ll need to protect your investment, and the best way to do that is with a homeowners insurance policy. Below, we’ll explain the ins and outs of homeowners insurance in Iowa. Our goal is to help new homeowners navigate the complicated process of purchasing their coverage as easy as possible.

If you’re looking to buy insurance on your home in Iowa, you’re likely going to be purchasing what’s known as an H-03 policy. It covers your home and your personal property from many different perils. But not all perils are covered in every situation, and companies differentiate between “all risk” and “named peril” policies. It’s important to know the difference between them all, and how it could affect your payout for potential claims. Below are some recommended coverage amounts for a $200,000 Iowa home insured with a broad policy:

 

Types of Coverage Coverage Amount
Replacement Cost (Dwelling) $200,000
Replacement Cost (Contents) $150,000
Personal Liability $100,000
Medical Expense $1,000
Deductible $500

Your coverage needs may be higher or lower depending on how much your home and your personal property are worth. You should also have a candid discussion with your insurance agent about potential perils that are common in your area, how much they can provide, and what (if any) supplemental coverage you may need to purchase in order to protect against future disasters.

Average Homeowners Insurance Rates in Iowa Legend: Average Rate Des Moines Cedar Rapids Davenport Sioux City Iowa City 200 400 600 800 1000 1200 1400 1600 1800 2000 $2059 $1318 $1389 $1795 $1511

 

If you live in a major city or an area with high property values, you’re likely looking at a higher homeowners insurance premium also. But keep in mind that these are estimates for average quotes across the region as a hole. In a city like Cedar Rapids, for example, your required premium payment could be as low as $593 from a company like AIG, or as high as $1,450 from the Farmers Insurance Exchange. That’s over $1,200 difference between companies for insuring property within the same city. That’s why it’s so important to shop around; not only can you save thousands on your premiums yearly, but tens of thousands (if not more) over the life of your home.

Lowest & Highest Property Insurance Rates in Iowa Legend: Lowest Estimated Rate Highest Estimated Rate Des Moines Cedar Rapids Davenport Sioux City Iowa City 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 $1812 $2718 $1160 $1740 $1222 $1833 $1580 $2369 $1330 $1995

Laws and Requirements

If you don’t want to buy insurance on a home that you’ve paid cash for, then you don’t need to (according to Iowa state law). They leave that mandate to your lending bank. Since your house is still technically the bank’s property until you pay off your mortgage, it’s in their best interest (as well as yours) to make homeowner’s insurance a mandatory requirement before they issue you a home loan. Most Iowa homeowners insurance companies will request that you purchase at least enough coverage to pay for the mortgage value of your home at the time of purchase. In order to make sure you are sufficiently covered, you will also need to take a home inventory.

Taking a Home Inventory

Before you purchase your home, and every year thereafter, it’s a good idea to take a thorough home inventory. Without it, you and your insurance underwriter would basically just make a wild guess as to how much coverage you need. If that guess is too low, you could be left paying for massive repair expenses out of pocket. And if it’s too high, then you’ll end up wasting thousands of dollars on coverage you don’t actually need.

Choosing What (and How Much) Coverage

Most Iowa homeowners insurance policies will incorporate Dwelling and Personal Property Coverage, Liability Coverage, Medical Payments Coverage, and Additional Living Expenses Coverage into a standard policy. You may also need coverage for:

  • Fires – protection from loss by fire may or may not be covered by your Iowa homeowners insurance policy. If you are concerned about fire damage for any reason, be sure to mention this to your insurance agent when crafting your policy.
  • Floods – a typical Iowa homeowners insurance policy will not include coverage for flood damage. You may have to add this coverage to your policy, or purchase separate coverage from the National Flood Insurance Program (NFIP).
  • Damage from Winter Storms – winter storms can be a problem in Iowa for many months out of the year. Most H-03 policies do cover damages incurred from the weight of ice, snow, or sleet. But if you’re unsure, the best thing to do is ask your insurance agent.
  • “Scheduled” Protection – Many Indiana insurance companies may offer you the option to “schedule” insurance coverage for expensive, difficult-to-replace items. These include cameras, art, jewelry, musical instruments, and more.
  • Covering Your Property – disasters usually don’t just damage the physical structure of your home – they can destroy your personal property as well. Most Iowa homeowners insurance companies recommend purchasing a coverage amount equal to approximately 75% of your property’s value.
  • Liability Coverage – Liability coverage helps pay out claims filed when someone is injured or another’s property is damaged while on your land. Most homeowners insurance policies will contain some provision for liability coverage.
  • Umbrella Coverage – some insurance companies will only sell you a policy which covers your home and property up to a certain dollar amount. If you require more coverage, this is usually provided by an umbrella coverage policy.

Replacement Cost vs. Actual Cash Value

If you file a claim for property and receive the replacement cost, then your insurance company foots the entire bill (minus your deductible). For payouts on actual cash value claims, however, you receive the replacement cost minus depreciation. Replacement Cost gives you the broadest financial protection, but at the same time could cost you in higher premiums. Actual Cash Value incorporates the depreciation of assets into the cost to repair or replace them for your insurance company. While actual cash value policies are often cheaper, you will be responsible for a larger portion of the financial burden in the event that disaster strikes.

How Your Credit Score May Influence Your Rate

There are many different variables that get taken into account when calculating your credit score (and how it will influence your annual homeowners insurance premiums). Most homeowners insurance companies rely on a “soft check”, or your insurance score, rather than performing a hard check on your credit history. This helps keep your credit rating higher while still giving the insurance company the information they need in order to determine a premium that gives you the coverage you need (while also protecting their profit margins). Because some insurance companies have data that shows a higher rate of claims filed by customers with lower credit ratings, they may adjust your premium to reflect this trend.

While federal law grants homeowners insurance companies permission to make this check, the state of Iowa has some laws on the books which help to protect consumers like you from artificially inflated premiums as determined by your insurer. If you don’t have a substantial credit history, if you have collection accounts based on medical expenses, if you have a past bankruptcy that is more than 7 years old, or an unfavorable total line of available credit, it is illegal for your homeowners insurance company to use that data against you when determining your premium. It is likewise illegal for your premium to be determined by your income, gender, current address/zip code, ethnicity, religion, nationality, or marital status.

Iowa Homeowners Insurance Rates by Credit Score Legend: Median Credit Homeowner Excellent Credit Homeowner Des Moines Cedar Rapids Davenport Sioux City Iowa City 200 400 600 800 1000 1200 1400 1600 1800 2000 $2059 $1462 $1318 $936 $1389 $986 $1795 $1274 $1511 $1073

Learn More

For more information, feel free to click any of the links you see in this article. They all lead to more detailed information about homeowner’s insurance, specifics on purchasing a policy, and how to find the best deal. You should also contact local resources in your state, such as:

The Iowa Department of Insurance

The Official Iowa State Government Website

Iowa FAIR Plan Association

Or contact them directly through the following resources:

Iowa Insurance Department
601 Locust St. – 4th Floor
Des Moines, IA 50309
Phone: (515) 281-5705
Contact the IID by Email

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