Is your home protected against chunks of ice slamming into it? What about the risk of wildfires? It’s easy to think it will never happen to you, but between 2005–2013, catastrophe-related claims made up more than 54 percent of all home insurance claims in the state. Now how certain are you that you’re properly insured?

Whether you are a first-time homeowner seeking to protect your investment or someone in the market for a new insurance company, it’s important to find an insurance policy that’s right for you and your home. We’ll show you how.

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The Best Homeowners Insurance in Minnesota

Freshome’s Recommendations: State FarmAmicaLiberty MutualEncompassTravelers InsuranceCountry Financial

The top three recommended insurance companies for Minnesota are State Farm, Amica, and Liberty Mutual. In addition, Traveler’s, Country Financial, and Encompass are all potential providers that serve a smaller, more regional area. Each recommended company had to meet a strict criteria. In addition to holding a J.D. Power overall satisfaction rating of three or more, each company had to have an A+ financial strength rating from A.M. Best, Moody’s, or Standard & Poor’s.

To provide you with an estimate of what prices would be like, I sought out several sample quotes. In order to control the tests as much as possible, I used the following standards: 1,020-square-foot home in Minneapolis with a market value of $69,300 and a dwelling coverage of $150,000. The example homeowner was a 26-year-old nonsmoking male with no prior claims and no pets who sought an HO3 policy.

Our Quotes
State Farm$1,491 Per Year
Amica$1,555 Per Year
Liberty Mutual$1,834 per Year

Although numerous discounts are available, I used the minimum amount possible in obtaining these quotes. The estimate you obtain will likely vary greatly from the ones below, if only because quotes are so highly personalized. Compare the example quotes, and then seek out your own to determine what company is the right choice for you.

In addition, make sure you obtain an HO3 policy. This is the most common type of home insurance policy in America; it’s known as an “open perils” policy. Understanding the difference between an “open perils” policy and a “named perils” policy is essential for determining the right type of homeowners insurance to cover your needs.

Open Perils Policies

It’s better to be prepared for everything than for only specific threats, and that’s what an open perils policy covers. This type of policy provides coverage against loss from all causes except that which is specifically excluded. For example, if your policy protects against everything except flooding due to burst pipes, then a Biblical-level flood could strike your home and you would be covered; however, if the temperature drops rapidly and your water main floods the basement, you would be liable for the damages out of pocket.

Named Peril Policies

A named perils policy is the polar opposite of an open perils policy. Rather than guard against all causes of loss, it only provides coverage against causes specifically named in the policy. However, many homeowners seek out a combination of open and named perils policies in order to provide coverage against all threats for their home.

How Coverage Is Determined

Homeowners insurance policies provide six different types of coverage distinguished by the letters A, B, C, D, E, and F.

Coverage A provides coverage for your dwelling itself. This amount should cover the cost of a full rebuild of your home, whether that is $100,000 or $500,000. Minimum coverage is usually 80 percent of the value of your home.

It may be beneficial for you to include an endorsement in your policy called an inflation guard. As time goes on and property values rise, your coverage will automatically adjust to reflect the increased value of your home.

Coverage B provides coverage for the other structures on your property, such as storage sheds, fences, car ports, etc. The amount of coverage B is typically 10 percent of coverage A; in the case of the example above, coverage B would be $15,000. The amount that coverage B provides can be increased by request.

Coverage C covers the contents of your home and property. This amount is usually limited to a maximum of 50 percent of coverage A. Items of great value, such as furs, paintings, and precious stones, should have their own policies to cover their value.

A note about coverages B and C: Minnesota law states that if an insurance company limits coverage of these two categories to a percentage of coverage A, then the company must allow policyholders to increase or decrease this percentage. Should you opt for a lower-than-average percentage rate, the company must issue a credit towards your premium. What this means is: should you have no structures on your property or no items of particular value, you may be able to reduce your premiums.

Coverage D covers the loss of use of your home. In the case that your home is destroyed or severely damaged, this coverage would pay for accommodation until the home is rebuilt. The amount provided is based either on standard-of-living costs in your area or the fair rental value of your home.

Coverage E is personal liability, a standard part of most homeowners insurance policies. It is typically limited to $100,000, but should more be required to protect your personal assets, an umbrella policy can cover the rest.

Coverage F is medical payment insurance. In the event that someone is on your property and is injured, this coverage protects you from being liable for their medical bills. One thing to keep in mind is that Coverage F is paid out whether your a liable or not.

Of the sample quotes, State Farm provided the best value for $150,000 of coverage A $15,000 of coverage B, $112,500 of coverage C, $100,000 of coverage E, and $1,000 of coverage F with a 1 percent deductible.

What You Should Know Before Getting a Quote

Before you look for a quote, you should know what prices are based on. Naturally, a home with $200,000 of coverage will have a higher premium than a home with $100,000 of coverage. A home living in a high-threat area will cost more to insure than one in a low-threat area. An “all-risk” open perils policy will cost more than a named perils policy.

The average cost of insuring a home in the state of Minnesota is $91 per month, or $1,088 per year. This is an 8 percent increase over the national average of $952.

What You Need to Know

When applying for quotes, there is some basic information you’ll need to have on-hand to make the process go more smoothly. These include:

  • Square footage of your home
  • Construction details (materials, roof age, year of construction, etc.)
  • Any homeowners claims you’ve made in the past five years
  • Your pets and their breeds
  • Details concerning recent renovations
  • Whether your home has been previously insured and with whom

“We usually go with the full coverage anyway, but we usually make sure we’re pretty forthcoming with our insurance agent when we’re talking to them about what our plans are for the house, and then we go with their recommendations on what they say we need for coverage.” – Katie Kurtz, Adorned Homes

Minnesota law protects homeowners and prevents insurance companies from adjusting rates based on:

  • The geographic location of the town the home is located in
  • The age of the home and/or the year it was built
  • If the home is in a different ZIP code than the town it’s found in
  • If you have been previously denied coverage
  • If the home was previously insured under Minnesota’s FAIR plan

What You Can Do to Lower Rates

If you find the quotes you’re given to be too expensive, there are several things you can do to potentially lower your rates. The first (and most obvious) is to go with a bundle policy, combining home and auto insurance. Since both are necessary, bundling them together can save up to 30 percent on both premiums.

Opting for a higher deductible can reduce rates, as well. The standard deductible in Minnesota is $250, but doubling that can reduce rates by as much as 12 percent. Increasing your deductible to $2,500 can reduce your rates by as much as 30 percent.

If you lower the amount of coverages B and C you have, then your premiums should drop accordingly. However, doing this can be risky; take care that you don’t lower them so far that you are underinsured. Most people underestimate the value of their personal property.

If you install safety and security systems that are monitored by local fire and police departments, your rates can be lowered. Even if the systems are only equipped with proximity alarms that sound within the home, you may still qualify for lower rates.

Certain professional and business groups offer discounts for being a member. Make a list of any organizations you belong to and speak with the insurance company to find out if you qualify.

Recent renovations to your home can also reduce your rates, as newer materials are less likely to fail catastrophically. And finally, because misplaced cigarettes account for an above-average number of house fires in Minnesota each year, certain companies may offer nonsmoker discounts.

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To quickly find and compare rates in your area, enter your ZIP code below.

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Why Are Minnesota’s Rates So Average?

The average cost of homeowners insurance in Minnesota is $1,088 annually, just 8 percent above the national average. However, that’s not to say all premiums are within a reasonable range. Factors such as extreme weather conditions and labor costs influence the premiums. In fact, Minnesota frequently ranks number one in the nation for the number of claims due to severe weather. Despite this, the costs are tempered by the previously mentioned laws that prevent insurance companies from adjusting rates based on geographic location.

FAQs

What are common coverage gaps?

Every policy, no matter how thorough, will have gaps in coverage. One of the most common gaps concerns valuable items; while personal property coverage will cover the value of furniture and similar items, expensive belongings like paintings and silverware are usually not covered.

In addition, if you have a home office, you may require a Minnesota business policy, as homeowners insurance won’t cover business-related losses in the event of a disaster.

A final, common coverage gap concerns mold. If you live in an area with high humidity or regular damp conditions, mold can be a regular occurrence. However, it can also be a costly problem to repair. Check with your insurance company to make sure you’re protected.

What about flood insurance?

The majority of homeowners insurance policies do not cover flood insurance. In Minnesota, anyone living in a community that participating in the National Flood Insurance Program is eligible to apply for a separate policy or an endorsement protecting their home from floods. More than 93 percent of Minnesota residents live in eligible areas.

Does filing a claim increase my premiums?

In most cases, no. Claims resulting from severe weather or other “acts of God” are not held against you. However, a claim filed for fire caused by negligence may adversely affect your rates.

Take Action

Minnesota residents are particularly at risk due to extreme weather conditions. Make sure your home has sufficient coverage for any losses you may incur as a result; don’t wait until a disaster strikes to learn your insurance policy doesn’t cover everything. Speak with your company today and get a quote for a better, more comprehensive plan.

Freshome’s Recommendations: State FarmAmicaLiberty MutualEncompassTravelers InsuranceCountry Financial

Compare Homeowners Insurance Rates

To quickly find and compare rates in your area, enter your ZIP code below.

Enter Your ZIP Code: