Cedar Rapids, Iowa - In a concerning development for homeowners in Iowa, several insurance companies have decided to withdraw their business from the state. The reason cited for their departure is the increasing frequency of severe storms and the subsequent high costs of repairs. The insurance industry claims that the situation has only worsened over time.

David Langston, President of the Beaver Creek Homeowners Association, is among those grappling with the repercussions. Langston's primary responsibility is to ensure that the 17 homes on East Post Court are adequately insured for external damages covered by the HOA. However, in January, he received news that Pekin Insurance, the company they had relied on for years, would no longer provide coverage for their homes.

Unfortunately, Langston is not alone. Pekin Insurance is one of at least four companies that have recently announced their decision to cease writing homeowners insurance policies in Iowa. Ed Faber, owner of Insurance Guru in Cedar Rapids, expressed his concern, stating, "I've never seen it this bad." Faber explained that the insurance companies' retreat is attributed to Iowa's history of severe weather events such as the devastating 2020 derecho, tornadoes, hailstorms, and damaging windstorms. Last year, the insurance industry recorded a significant $21 billion underwriting loss.

Faber further added, "It has been year after year of bad weather events, but last year I started seeing companies that are pulling back on business." The strength and cost of these storms are on a constant rise, which Professor Dennis Smith from Florida State University predicts will only continue. He emphasized the impact of climate change, stating, "The Earth is warming faster than it ever has been because of some of the actions we take as part of our civilization."

Regrettably, the consequences of insurance companies' decisions are already being felt by homeowners like Langston and those residing in Beaver Creek. Their new insurance policy costs a staggering 50% more than their previous one. The situation is alarming, given that many homeowners may assume they are not at risk due to the absence of coastal flooding, fires, or earthquakes in the area. Langston warns, "I don't think people understand what tidal wave may be coming their way."

As the frequency and severity of storms continue to rise, homeowners in Iowa are faced with the daunting task of finding alternative insurance options. The impact of these companies' withdrawal will undoubtedly have long-term consequences on homeowners' financial stability and ability to recover from storm damages. The state government and insurance regulators may need to intervene to address this growing crisis and ensure that homeowners have access to affordable and comprehensive coverage in the face of escalating climate-related challenges.