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Iowa Home Insurance

Iowa has many pleasant attributes, including a wide range of living environments. Urbanized areas are often surrounded by stretches of open farmland. Agricultural production is a major part of the state economy. Iowa enjoys a pleasant diversity of landscapes, economics, and communities.

Known for sometimes turbulent weather, it is part of the Great Plains and has an historic pattern of windstorms, severe floods, and tornadoes, and it is among the leaders in the nation in such events.

Home insurance in Iowa does not reflect the turbulence in seasonal storms, Iowa ranks in the lower third of insurance premium costs. Its average premium rate is significantly below the national average. There are standard types of home insurance in Iowa with defined perils and percentages for payment in replacement value.

When comparing quotes, premium rates, and insurance coverage, our FREE comparison shopping tool above can be of benefit to homeowners.

Home Insurance Explained

Home insurance includes policies to rebuild, repair, or replace damaged homes or other structures. Home insurance also covers the contents of the home. Home insurance includes policies that cover renters and condominium owners.

Homeowners insurance focuses on perils or destructive events such as storms and tornadoes. It often excludes some things from coverage such as floods, and homeowners must find specialized insurances to cover such things as floods and acts of war or rebellion.

Insurance Rates in Iowa

Iowa insurance rates are among the lowest in the United States. At an average of $750 per year, they are well below the national averages of approximately $850 per year. While not near the lower ranges of premiums in the country, it is in the lower group.

The marketplace for home insurance in Iowa is active and competitive. The state government maintains an active role in regulating companies and licensing insurance transactions

Sources of Insurance

The primary sources of Iowa home insurance policies come from Farm Bureaus, insurance exchanges, national carriers, and local insurance companies and agencies. Iowa’s low prices for home insurance result from competition between the national insurance carriers and local organizations.

The positive sides of the competition are low premium prices. To the extent that competition has a downside, it is that few companies offer extras such as consumer education and deep discounts for consumer attributes such as non-smokers, or extras like inventory maintenance tools to keep track of possessions in the event of loss.

Home Insurance Policy Valuations

The Actual Cash Value method is popular among carriers for older homes because it uses several factors to reduce the value of the insured property. Actual cash valuations include age, condition, and depreciation. While more accustomed to commercial buildings, concepts age, condition and worth are used to determine value.

Replacement Costs based policies pay a stipulated contract amount as the value of the property. The replacement value is not reduced by depreciation or other factors. Replacement policies require that owners insure property for at least 80 percent of the replacement costs.

This approach is an advantageous policy for homeowners concerned with maintaining the home as a residence and as an investment.

Guaranteed Replacement costs advance a higher level of funding for replacement costs. These policies pay up to 125 percent of the stipulated replacement costs. One reason for buying this kind of policy is purely practical, in the event of widespread damage, construction cost rise due to demand.

With materials, contractors, and labor in short supply, prices rises and delays are inevitable.

Conditions in Iowa Are Favorable

Homes in Iowa tend to be smaller and older than the national averages. Construction costs are lower than in most states. This combination indicates that replacement costs in Iowa are lower than most other states.

Building costs and labor are major drivers of home insurance premiums.

Determining Replacement Costs

Replacement costs are key values in insuring homes and contents from loss. Establishing the replacement cost has two important impacts. First, it determines the value of the policy since the goal is to cover the costs of replacing all or part of a damaged home.

Second, it helps reinforce the value of the home as an asset, and the equity the owners hold.

Determining replacement costs requires facts and assessments. The value of a home consists of its fair market value; Since the home it is not being sold but insured, the value is determined by appraisals by experts. Basically, the appraisals seek to capture an estimate of sales price by reference to comparable units under similar market conditions.

Below is a list of the standard Iowa Insurance perils. Insurance carriers incorporate these items into standard form home insurance policies and represent stated inclusions and exclusions for coverage. The standard Iowa home insurance perils covered in standard policies are as described below.

  1. Fire, lightning
  2. Windstorm, hail
  3. Explosion
  4. Riots
  5. Damage by aircraft
  6. Damage by vehicles (not owned by the insured)
  7. Damage from smoke
  8. Vandalism
  9. Theft
  10. Window breakage
  11. Falling objects
  12. Weight of snow, ice, sleet
  13. Damage from steam heating or water heating system/appliances
  14. Leakage or overflow of water or steam
  15. Freezing of plumbing, heating, air conditioning
  16. Short-circuit damage to electrical appliance

Standard Iowa Home Insurance Forms

The most used basic forms for Iowa home insurance are HO-2, HO-3, and HO- 8.

  • HO-8 is for older homes, and its primary distinction is the emphasis on returning the property to useful condition in lieu of replacement of the same kind and quality. Older home materials may largely be unavailable or no longer economical. These actual cash policies are tailored to older homes.
  • HO-2 is broad coverage, and it includes perils one through sixteen. It pays replacement values for total loss.
  • HO-3 covers all perils not specially exempted from policy coverage.
  • H0-4 and HO-6 cover renter’s and condominium owners respectively. The focus in these forms is on personal property, since the real property coverage in a condominium is a common ownership among the legal tenants.

First Time Buyers

Many national carriers and the Iowa farm bureau offer special advice and educational materials for first-time buyers. These materials and efforts help explain the processes and terminology involved in home ownership and insurance and standard forms.

Whether a new buyer or experienced with many past purchases, home insurance is an important part of home ownership. Home insurance protects the investment that is typically the largest investment for an individual or family.

The insurance landscape in Iowa varies by area and type of property. Many insurers restrict coverage to single family homes and two-family units. Insuring Mobile homes and manufactured homes is sometimes more difficult than single family, two family or quadruplex units.

Many insurers have made changes in recent years to keep premium prices low. They have reduced coverage and offered fewer deep discounts. Iowa law favors the insurance carriers in some critical ways. Insurers can deny coverage for any reason, and if granted, they can withdraw within the first 60 days.

The laws permit the use of information in a negative light, such as prior insurance claims to deny coverage.

Comparison Shopping is Key

Consumers must use comparison shopping to find the best fit and annual premiums for Iowa home insurance. Getting in a large number of quotes and comparing the strengths and weaknesses of coverage options can be easier with a comparison shopping tool.

Use our FREE tool below to start your search now!

Consumers can make trade-offs to fit their situation and customize standard offers. Deductibles are one area where consumers can exercise choices. High deductibles can lower premiums. Consumers can accept high deductibles for some areas of coverage and low or no deductibles in areas of greater importance.

In effect, this practice leaves major repairs and replacement events to policy coverage while paying for other less critical items from cash reserves. Insurers offer custom policies at higher rates than standard policy coverage.

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