The new Bankrate.com rankings take into account several factors, but severe weather patterns are a concern for years to come.
MINNEAPOLIS — As a new round of extreme weather forces many Minnesotans to clean up and file insurance claims, the devastating storms also signal a growing problem for homeowners across the state: Minnesota ranks among the worst states for homeowners insurance.
A new analysis from Bankrate.com ranks Minnesota the fourth worst state for home insurance.
“With Minnesota, it surprised me a bit too, but it’s usually just a pretty risky state in terms of weather,” said Cate Deventer, a licensed insurance agent, who is also a writer and editor for Bankrate. .com.
Deventer says the variety of extreme weather across all seasons in Minnesota contributes to its fourth-worst ranking in several ways. According to Bankrate’s 2021 study, the average cost of home insurance in Minnesota is $1,785 per year for a policy with $250,000 coverage. That’s $500 more than the national average.
In addition to the overall cost, Bankrate.com also considers three other factors:
“Minnesota ranked seventh in weather-related losses,” Deventer said. “The Insurance Information Institute ranked it fifteenth for 2021 tornadoes. There were 37, [and] fortunately no deaths. Minnesota was ninth in wildfires, which surprised me. There have been more than 2,000 wildfires burning 69,000 acres of land in 2021.”
Unfortunately, state leaders say improvements in weather-related losses are unlikely to come easily.
“These larger storms are becoming more common,” said Minnesota Department of Commerce Commissioner Grace Arnold.
Years of weather analysis by the National Oceanic and Atmospheric Administration (NOAA) have shown that Minnesota is warming faster than other states and the risks associated with severe weather have increased with it.
“Your insurance may seem expensive, but rebuilding after a disaster is really, really expensive,” Arnold said. “Because we’re a department that works across all sectors of financial services and energy, we think a lot about how to build resilience in communities and people.”
In response, Arnold says the Commerce Department has worked with the legislature to change the ways insurers can work with customers to make investments now that will lower costs in the long run.
“One of the things we’ve been discussing with the industry is how we can work together to provide discounts or help homeowners invest in things that will reduce risk in the long run, like a stronger roof and other things like that,” she said.
At the community level, Arnold says federal infrastructure funds are being used to help co-ops and municipal utilities bury more of their power lines, helping reduce the risk of widespread outages and the losses they cause.
“As our weather and our climate change, we need to think about risk, personally,” she said. “But also, I think it’s important for people to understand the different ways your communities can be more resilient.”
Although the latest rankings are based on statewide averages, many factors go into what you might pay for homeowners insurance. Experts say it’s important to check with your agent if you have questions about your rate, what you’re covered for, and what options you might have to make your property more weatherproof.
If you’re a homeowner who needs to make an insurance claim as a result of the latest severe weather, Arnold says you should start by accessing the Disaster Information Center.