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Minnesota Housing News
Matt Mikus

Commerce Department warns homeowners to check insurance for wind, hail coverage changes

Storm damage outside a house
Severe storms cause widespread tree damage and power outages around White Bear Lake on July 20. The Minnesota Department of Commerce wants homeowners to check their insurance policies after insurance complaints more than doubled since 2020 due to extreme weather events caused by climate change and other economic pressures.
Kerem Yücel | MPR News 2023

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The Minnesota Department of Commerce wants homeowners to check their insurance policies after insurance complaints more than doubled in the past three years.

The Minnesota Department of Commerce reports homeowner insurance claims have more than doubled since 2020, jumping from 569 complaints in 2020 to almost 1,185 complaints in 2023.

Premiums for homes and vehicles have had significant increases due to extreme weather events caused by climate change, along with economic factors like higher labor and material costs.

The increase in complaints comes from new exclusions that narrow coverage due to wind and hail damage, or require higher deductibles to cover the costs. The Commerce Department says policyholders are often not aware of the changes until after they file a claim.

“To avoid surprises after you submit a claim, be aware of possible changes to your homeowner insurance coverage,” said Commerce Deputy Commissioner of Insurance Julia Dreier. “As Minnesota experiences more effects of our changing climate, with more extreme weather events such as hailstorms and windstorms, insurance costs are going to increase and we want Minnesotans to be prepared.”

Several insurance policies may now have higher deductible for hail and wind damage, either as a flat rate or as 1 to 2 percent or more of the home’s replacement value.

But 2 percent on a hypothetical home with a value of $400,000 means the homeowner will need to pay $8,000 before coverage kicks in.

“We advise homeowners to consider the math,” Dreier said. “Two percent may sound affordable, but it could easily wind up being a significant expense and lead to sticker shock given the value of a typical home in Minnesota.”

Premiums for homes and vehicles have seen significant increases due to more extreme weather events caused by climate change that damage properties across Minnesota and the U.S. That also costs insurers higher losses and costs to cover damages caused by more costly natural disasters. And economic factors, like higher labor and material costs, also contribute to the rises in premiums.