Experts warn climate change could lead to higher insurance costs for Iowans

As the climate warms, experts are warning that Iowans could start to see insurance cost hikes.

William Gutowski, professor emeritus of meteorology at Iowa State University, said that every one of the Earth’s 10 hottest years on record has been in the last decade. He said that 2024 specifically broke all previous records.

“When those temperature changes lead to the types of extreme events and damages that we have seen more of in recent years, that plays out in increased costs, which then show up as higher insurance rates,” Gutowski said.

States like California, Texas and Florida have seen rising insurance costs due to climate change-fueled natural disasters, but David Courard-Hauri, professor of environmental science and sustainability at Drake University in Des Moines said Iowa “is not immune” to similar impacts.

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Gutowski and Courard-Hauri are two of nearly 200 professors across the state of Iowa from 26 colleges and universities — including the University of Iowa, Coe College, Des Moines University, Kirkwood Community College and the University of Northern Iowa — who have cosigned this year’s Iowa Climate Statement.

This year’s statement, endorsed by 179 scientists and released Monday, is focused on the rising cost of insurance and insurance premiums as climate change causes more extreme weather across the country and globally.

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Courard-Hauri said the climate statements — annual documents that have been written and endorsed by hundreds of Iowa scientists for 15 years — are vetted by the state’s top experts in climate change and environmental research to provide “Iowa specific context, encouraging preparedness and resilience in the face of the climate crisis.”

Courard-Hauri said the professors and researchers decided to focus on rising insurance costs for this year’s statement because it is “a topic that frequently gets ignored in the climate discussion.”

Climate change’s tie to insurance

ISU’s Gutowski said that Earth’s temperatures have been “generally going upward” for the last several decades due to the increase in greenhouse gasses, which result from burning fossil fuels.

“These higher temperatures allow more moisture in the atmosphere, which yields a tendency for more precipitation when storms do occur, and that leads to more flooding,” he said. “When that water condenses, it adds energy in the form of heat to those storms, which can make them stronger, especially the severe weather. (The) storms we experience in late spring into early summer often cause substantial damage, the outcome has been a market increase in the number of inflation-adjusted billion-dollar disasters in Iowa.”

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Peter Thorne, University of Iowa distinguished chair and occupational and environmental health professor, said scientists are using “advanced science and massive data streams” to predict weather patterns and determine what the future of climate change may look like. He said these models can be used to evaluate the connection between human-caused climate change and the severity of weather patterns.

However, Thorne said insurance companies use the same data.

“The insurance industry applies these advanced climate models who line their rates and anticipated losses across their customer pool,” Thorne said.

He said this has been seen in states like Florida, Texas and California where climate change has led to more severe hurricanes, extreme flooding and wildfires.

In Iowa, he said the “rapidly rising insurance premiums” are driven by the cost of labor, building materials and reinsurance, which is a form of insurance for insurance companies themselves.

“These costs all are amplified by climate change and are escalating and, in some cases, insurers are leaving certain markets, including Iowa, due to rising costs and less favorable loss ratios, and hence lower profitability,” Thorne said.

According to the Insurance Information Institute, the average home insurance for Iowans who own their home cost about $1,268 in 2022.

Comparatively, the average home insurance premium in Iowa a decade earlier was on average $779 for homeowners, marking a 62.8 percent increase between 2012 and 2022.

A call to act

Emma Stapleton Thornell, a research assistant professor with the University of Iowa, said measures must be taken to address the use of fossil fuels, which will help reduce the burden of insurance premiums for Iowans and beyond.

“Climate change is here, and it's past time to act,” she said. “We know that we need to reduce greenhouse gas emissions before insurance costs become overwhelming.”

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Stapleton Thornell said that she — and her research peers — hope this year’s Iowa climate statement will bring awareness to property owners about how rising insurance premiums could impact Iowans more significantly, like they do in other states.

To help combat it, she said Iowans should consider planting “native wind buffers,” like shrubs or tall grasses to slow wind speed. She said that “strategically” placing trees can help reduce extreme heat and energy bills.

“Collectively, these small acts can save insurance costs, but in the end, legislation is needed to better reduce liability,” Stapleton Thornell. “So, I would recommend asking your local legislature to adopt strong building standards.”

Thorne said there are many factors that go into increased insurance premiums, like inflation and reinsurance costs, but climate change only “magnifies these effects.”

“In the end, the only way to stop these climate-related costs from rising is to reduce greenhouse gas emissions from burning fossil fuels.”

Olivia Cohen covers energy and environment for The Gazette and is a corps member with Report for America, a national service program that places journalists in local newsrooms to report on under-covered issues. She is also a contributing writer for the Ag and Water Desk, an independent journalism collaborative focusing on the Mississippi River Basin.

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Comments: olivia.cohen@thegazette.com