A new report indicates the rising cost of insurance premiums may drive more Iowans to reduce their coverage or drop insurance altogether — putting pressure on the state’s insurance industry.
Ben Murrey is Iowa policy director for the Common Sense Institute, which issued the report. “Probably the primary driver of rising premium costs is inflation,” Murrey says, “rising replacement costs.”
Not only does it cost more to repair or replace a home or business that’s damaged, the analysis shows the risk of natural disasters like tornadoes is rising in Iowa. The average cost of homeowners insurance premiums has increased 273% in the past 15 years, climbing to a statewide average of $2533 this year. “It’s the derecho and it’s the 2008 flood was really big for Iowa,” Murrey says, “and it really made insurers kind of rethink risk here in the state.”…