Due to the competitive nature of Minnesota’s rental market, owning a home is, for most Minnesotans, more affordable than renting. However, home ownership does come with many significant expenses, which residents must be prepared to pay in order to reap the rewards. One of the most significant of these is homeowners insurance, which, although potentially expensive, is worthwhile for the peace of mind it gives Minnesotans in times of trouble. Detailed below are a few excellent homeowners insurance Minnesota providers, as well as available discounts and other tips for keeping premiums to a minimum:
What Are the Insurance Provides in Minnesota?
Numerous insurance options are available in the state of Minnesota. Although most residents opt for State Farm, Farmers Insurance, and other nationwide carriers, alternatives such as the TruStage Program and the Minnesota FAIR Plan are also available.
Private Providers
Most Minnesotans choose to purchase home insurance from providers on the private market. These providers tend to be nationwide companies that also offer car insurance and life insurance. Often, these different types of insurance can be bundled in order to secure significant savings. Popular Minnesota insurance providers include State Farm, Liberty Mutual, MetLife, and Farmers Insurance.
Credit Unions
Some Minnesota homeowners prefer the local appeal of credit union-based insurance plans. The region’s credit unions offer excellent service and often boast very competitive rates. Many local credit unions partner with the TruStage Program to offer affordable coverage.
Minnesota FAIR Plan
If you are unable to secure property insurance from private providers or credit unions, you may be eligible for the Minnesota FAIR Plan. This program offers limited property insurance in hopes of improving properties and helping homeowners return to the private insurance market. FAIR’s coverage, while far better than nothing, is not as desirable as standard plans from private insurance providers. The non-replacement coverage offered by FAIR only covers a limited range of causes of loss. Types of coverage offered for occupied residential properties include fire, vandalism, and limited theft.
What Are the Available Discounts?
When selecting a homeowners insurance plan, it is important to pay attention to local discount programs, which allow certain Minnesotans to save considerably on premiums or secure more extensive coverage. Special discounts target seniors, public employees, and a wide array of other Minnesota homeowners.
State Employees
From excellent medical coverage to solid retirement packages, there are many benefits to working for the state of Minnesota. State employees are eligible for significant group rate discounts through MetLife, which provides especially extensive discounts for longtime public employees.
Senior Discounts
Several top insurance providers in Minnesota partner with AARP to provide significant savings for senior homeowners. Depending on the provider, benefits extended to AARP members may include lifetime renewability, extended replacement cost coverage, deductible forgiveness, and special coverage for condos.
Non-smoking discounts
Smoking significantly increases the risk of fire, so it is in insurance providers’ best interest to promote smoking cessation. Thus, those who do not smoke are often eligible for significant homeowners insurance discounts.
How does location impact my insurance rate?
Minnesota prohibits insurance providers from changing rates based on a town’s geographic location or zip code. However, because of regional differences in home value, quality, and a variety of other factors, premiums tend to be far lower in certain areas. The lowest rates can all be found near the Canadian border, with premiums averaging far lower in Ely and Thief River Falls than in other cities. Home insurance rates tend to be far higher near the Twin Cities, especially in suburbs in which median homes are valued at over $300,000. In general, homeowners insurance is more expensive in Minnesota than in other states. The National Association of Insurance Commissioners reports that, in 2015, Minnesota homeowners paid an average of $1,222 in annual premiums, compared to just $1,096 nationwide.
Should I lower limits for Coverage B and C?
Before determining whether lower limits for certain types of coverage are worth pursuing, it is important to first understand the basics of each type of coverage. The main type of coverage is Coverage A, which involves the cost of replacing the home. Coverage B is largely determined by Coverage A levels, but it involves other structures on the property. Coverage C, which involves compensation for loss of personal property, is generally limited to half of Coverage A.
In order to secure lower premiums, Minnesota homeowners have the option of reducing their coverage limits for B and C. Insurance companies are mandated by state law to offer lower limits on these types of coverage and to adjust premium requirements accordingly. However, homeowners who lower these rates risk being underinsured. It is up to each homeowner to determine what amount of risk is acceptable.
How does filing a claim impact insurance premiums?
Filing a claim can be a quick ticket to higher insurance. CNN Money reports that, in some regions, a single claim can hike annual insurance premiums up by hundreds of dollars. This is certainly true in Minnesota, where average premiums skyrocketed in 2011, following a summer of extensive storm damage. The size of the claim has little impact on the extent of the premium increase, but the type of claim does matter. Liability, theft, and vandalism claims can all be incredibly costly, so it may be necessary to think twice before filing after suffering a bicycle theft or other similar incident.
Insurance does not have to be a huge sacrifice for Minnesota homeowners. By shopping carefully, researching discounts, and avoiding unnecessary claims, it is possible to keep annual premiums to a minimum.
2 Point Highlight
1. Most Minnesota residents opt for State Farm, Farmers Insurance, and other nationwide carriers, but alternatives such as the TruStage Program and the Minnesota FAIR Plan are also available.
2. Minnesota insurance companies are mandated by state law to offer lower limits on Coverage B (non-home structures) and Coverage C (personal property)Â and to adjust premium requirements accordingly.
