When buyers think about what a home will cost each month, they usually think about the price and the interest rate. Lately, the number that's been surprising people most is homeowners insurance.
What's happening in Iowa
An Insurify analysis reported by Iowa Capital Dispatch found that Iowa's average home insurance cost rose about 28% in 2025, to roughly $2,800 a year. That was one of the largest increases in the country, and Insurify estimated Iowa premiums had climbed about 54% over two years. Iowa is still below the national average, but the gap is shrinking.
NerdWallet's 2026 report found a similar story over a longer window: Midwest premiums rose about 25% from early 2023 to early 2026, after years of heavy wind and hail claims. The good news is that national premium growth has slowed, and Insurify projected a much smaller increase for Iowa in 2026.
Why it matters for your mortgage
Most mortgages include an escrow account. Each month, part of your payment goes into escrow, and your lender pays your property taxes and insurance when they're due. So if your premium goes up $600 a year, your monthly payment goes up about $50.
Insurance also counts in your debt-to-income ratio, which is how lenders decide how much you qualify for. A higher premium can shrink your buying power. Read more about how debt-to-income works.
How to budget for it
- Use a real number. When you run a payment estimate, plug in a realistic insurance cost for the type of home you're shopping. My mortgage calculator lets you enter your own figure.
- Get quotes early. Once you're serious about a home, call an agent for a quote. Older roofs, older electrical systems, or homes in rural areas far from a fire station can cost more to insure.
- Plan for increases. Escrow payments can change each year when your insurance renews or taxes are reassessed. Leave room in your budget.
Ways to keep the cost down
- Shop several insurers. Pricing varies widely, and an independent agent can compare multiple companies at once.
- Bundle home and auto. Most insurers discount bundles.
- Choose your deductible wisely. A higher deductible lowers your premium, but only if you have savings to cover it after a storm.
- Ask about roof discounts. Newer or impact-resistant roofs can qualify for lower rates in hail-prone areas.
- Review every year. Don't let your policy auto-renew without comparing.
Insurance is part of the true cost of owning a home, and I'd rather you know the real number before you fall in love with a house. If you want help estimating the full monthly cost on a home you're considering, send it my way.
