Minnesota homeowners insurance
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Minnesota homeowners insurance guide
About 73% of the over 5.7 million people who live in Minnesota own a home. Almost 73% of the homes in the state are worth at least $200,000, representing a substantial financial investment. Minnesota homeowners insurance provides financial protection for homeowners in the state.
Minnesota home ownership risks
Between 2000 and 2012, extreme weather events caused over $4 billion in property damage. Thunderstorms are the number one cause of weather-related property damage in the state.
Minnesota frequently experiences powerful winter storms, heavy snowfall and frigid temperatures. The state averages 61 inches of snow per year. The weight of all that snow can cause damage to roofs, and melting snow can lead to floods.
In addition to flood risk from snowmelt, Minnesota is seeing an increase in frequent and heavy rainfall compared to historical data. Windstorms also pose a risk to property in the state.
With an average wind speed above 12 mph, Rochester is the second-windiest city in the United States. Additionally, Minnesota averages about 29 tornadoes every year. Most of the state's tornadoes occur in May, June or July, and the most damaging storms often happen in groups of outbreaks, such as the June 17, 2010, outbreak that produced 48 tornadoes in six hours.
Minnesota homeowners insurance coverages
Homeowners insurance usually bundles together several types of coverage that protect your home, personal property and family. Different insurance companies may offer slightly different coverages in their standard homeowners policies.
Dwelling Coverage
Dwelling Coverage pays to repair or replace your home when a covered cause of loss damages it. Most homeowners policies cover all losses that are not specifically excluded by the policy. However, some policies may only cover specific perils, such as fire, wind or explosion.
Replacement Cost versus Actual Cash Value
Replacement Cost is the cost to repair, rebuild or replace your dwelling at the current costs of construction. Actual Cash Value is the dwelling replacement value, less a depreciation deduction that varies based on the age and useful life of the property. This level of insurance is usually not enough to repair or rebuild a dwelling.
Homeowners policies usually cover structures at Replacement Cost and contents at Actual Cash Value. However, many companies offer an optional endorsement to cover contents at replacement value for an additional charge.
Other Structures
Other Structures coverage pays for damages to structures on your property other than your home. Examples include garages, sheds, patios and fences.
Contents Coverage
Contents Coverage pays for damage to personal property, such as cash, clothing, furniture and electronics. Most policies place limits on or exclude coverage for specific types of personal property, such as automobiles, boats, guns, collectibles and musical instruments. You may be able to add an endorsement to provide additional coverage for some types of property.
Additional Living Expenses
After a covered cause of loss, Additional Living Expenses coverage pays for expenses that you normally would not have. For example, if you must stay at a hotel and eat at restaurants while your kitchen is being repaired after a fire, your policy may pay for this expense.
Liability Coverage
Liability Coverage covers money you owe to another person because of injuries or property damage a member of your household caused. It also covers your legal expenses if someone sues you. However, it does not cover liability due to an auto accident or business operations.
Medical Payments
If a guest gets hurt on your property, Medical Payments coverage may cover the guest's medical bills. This coverage applies whether or not you are at fault for the injury.
Flood Insurance
Because homeowners policies usually exclude coverage for flooding, you may want to purchase a separate flood policy. Depending on where you live, you may be able to purchase a policy from a standard insurance company or from the National Flood Insurance Program.
Earthquake Coverage
Minnesota is one of the lowest-risk areas in the United States for earthquakes. There have been 20 small to moderate quakes in the state since 1860. While the risk of earthquake damage is low, if you want coverage, you must purchase a separate policy or endorsement because homeowners insurance usually excludes earthquake damage.
Average cost of Minnesota homeowners insurance
Minnesota homeowners pay an average of $250 per month for homeowners insurance, which is higher than the national average of $206. Minnesota residents can save money on their premiums by comparing rates from different companies with VIU by HUB.
Factors that affect Minnesota homeowners insurance rates
Multiple factors can affect how much you pay for homeowners insurance in Minnesota.
Coverage level
The higher your coverage limit, the more risk there is to the insurance company. Higher-value homes typically cost more to insure because the potential payout on claims is higher.
Deductibles
Because deductibles reduce the amount insurance companies must pay on claims, choosing a higher deductible usually results in lower premiums. Some policies may have separate deductibles for different types of coverage.
Location
Larger cities with higher home values and crime rates usually have higher premiums. Also, homes in areas with more frequent weather damage and homes farther away from a fire department or fire hydrant may have higher rates.
Characteristics of your home
The features of your home and the materials it's made of impact how much it costs to repair or rebuild it. Construction materials also affect how well your home resists certain types of damage. Materials that are more fire or wind resistant, such as brick or stone, may lower your rates compared to more combustible materials, such as wood.
Older homes are often more expensive to insure because older plumbing and wiring may be more prone to causing water or fire damage. You may be able to lower your premiums by updating your home.
This information is intended for general informational purposes only and is not intended to constitute legal advice.
Sources:
Centers for Environmental Information