(Radio Iowa) – Tornadoes and other types of severe weather can make life hard on property owners, but also on the companies that insure them. The Insurance Journal says most home insurance companies paid out more in claims in Iowa last year than they collected in premiums. In some cases, the so-called “loss ratio” was well over two-to-one. Iowa Insurance Commissioner Doug Ommen says the last few years have been especially difficult for mutual insurance companies, which are owned by policy holders and write most of the policies in Iowa.

“They’re able to write business in our state based upon obtaining reinsurance,” Ommen says, “and the reinsurance rates have just really gone up dramatically, since really the 2020 derecho, and the hail storms that we’ve had in very recent years.” Ommen says national carriers have more access to capital, and are able to spread risk across a larger geographic area. Just a few years ago, he says Iowa led the nation in affordability for homeowner’s insurance, but that changed with the derecho. Ommen encourages property owners to contact their insurance agent and review policies every year, so they aren’t caught by surprise when a storm causes damage and the insurance payout isn’t what’s expected.

“So many times, the complaints that come to our office are driven by that idea that ‘I didn’t understand,’ and that’s why it’s critically important to understand what is the coverage,” Ommen says, “to do an annual review of your coverage, to know and understand what that means.”

The trade publication Insurance Journal says nationally, the number of insurers entering liquidation or receivership in 2023 was close to twice the 2022 level. Many of those companies provided reinsurance, essentially coverage for insurance companies.