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An insurance policy offers you a level of protection that not many other things can do. If you're investing in Minnesota real estate, you must protect your property with all the resources you have.
Minnesota is known for being relatively safe, and it's not as prone to natural disasters as other states in the U.S. Unfortunately, your property will still be exposed to many dangers and risks along the way, so why not take that weight off your shoulders?
Getting homeowners insurance in Minnesota ensures your property is protected from the most common risks like theft, vandalism, and weather damage. Moreover, if you get add-ons for your insurance policy, you could get a higher level of protection that saves you money and time in the future.
We know that investing in homeowners insurance involves an extra expense, but if you think about the money you could potentially save if your home got damaged, it makes more sense to do it.
This page covers everything you should know about homeowners insurance in Minnesota, as well as our top five picks for insurance in the state.
What Is Minnesota Homeowners Insurance?
Homeowners insurance is a policy you get for your property. It protects your investment in case any event, disaster, or accident damages it. Most of the time, you can use homeowners insurance in Minnesota to cover interior/exterior damage, loss of personal belongings, and personal injuries.
Your homeowners insurance policy will have certain limits depending on the package you get. The more add-ons you get for your policy, the more coverage you'll have in case something happens to your property.
It's important to note that homeowners insurance isn't required at a state or federal level. This means that you're not obligated to get insurance for your home.
If you're getting financing for your home, however, you may get asked to have insurance. Lenders are allowed to ask you for an insurance policy for your home, even though you're not legally required to have it.
Homeowners insurance should be one of your priorities regardless of whether you're getting a loan or not. You never know what can happen to your property, and most of the time, the cost of the damages you experience will be higher than you expect.
Paying your deductible could give you the peace of mind you need even if your property gets damaged. Standard homeowners insurance policies do a great job of covering everything, but some companies offer a few extras that may make your coverage even better.
What Are the Average Home Insurance Costs in Minnesota?
According to NerdWallet, the average annual premium for home insurance in Minnesota is $1,845 per year (or $154 per month). This amount is slightly higher than the national average of $1,820 for $300,000 in dwelling coverage.
Why does homeowners insurance in Minnesota cost more than in other states? It's mostly because the state is exposed to a few more weather-related risks compared to others. In Minnesota, windstorms and hail are common. Fortunately, these events are less common than in other states like Colorado.
Does the average annual premium mean that you'll pay that exact amount for your policy? Not necessarily. Your quote will depend on what perks or add-ons you get for your package. If you get the most basic policy, you could pay less money.
On the other hand, many companies offer discounts to clients. If you apply, you could save a bit of money. These companies offer discounts to get you to choose them over the competition.
The best way to know precisely how much you'll spend on insurance is to talk to your insurer options and build a package that suits your needs.
What Factors Affect Your Home Insurance Coverage in Minnesota?
Your home insurance premiums will be affected by plenty of other factors besides the state you're investing in. Knowing these factors will play a huge role in finding a great quote for your property:
- ZIP code
- Dwelling coverage
- Claims history
- Credit history
- Age, type, and value of your home
- Marital status
- Deductible
These are the standard factors you must be aware of. However, there are a few "special" conditions that some companies also take into account when evaluating your premium:
- Distance from water
- Distance from a fire station
- Attractive nuisances
- Dog breed
Not all companies prioritize the same factors, which is why it's so important to compare different quotes. Don't go for the first option you find.
Do You Need Homeowners Insurance or Landlord Insurance?
Are you wondering whether you should get home or landlord insurance? This section explains everything you need to know about both.
The first thing you should keep in mind is that landlord insurance tends to cost more than home insurance. This is because landlord insurance covers the owner of the property, not the person occupying it. If you want to apply for homeowners insurance, you must live at the property.
Regarding belongings, when you get homeowners insurance, your policy will cover most of your personal property. Landlord insurance, however, will only cover the personal property you rent to your tenant. Both types of policies offer similar protection from weather events.
What about liability? There's a huge difference there. With homeowners insurance, you have protection regardless of where the accident happened. Landlord insurance will only give you protection for events that happen on the property.
Your homeowners insurance will provide coverage for loss of use. This means that if your property gets damaged excessively and becomes unlivable, you could get money for lodging and meals while it gets repaired.
Landlord insurance, on the other hand, covers loss of income. If the event results in you not getting your full rent payment for some time, you could get money to cover it.
Which type of policy should you get, then? It depends on what you'll be using your property for. If you're going to live at the property, homeowners insurance will be the perfect option. On the other hand, if you want to rent your property for long terms, landlord insurance may be better.
What if you want to live at the property and rent it at the same time? Here, homeowners insurance would still be the better option.
What Should Your Minnesota Homeowners Insurance Have?
Most insurance companies will offer basic packages that include most of the things you need, including:
- Dwelling Coverage
- Loss-of-use Coverage
- Personal Property Protection
- Medical Expense Coverage
- And more
However, there are a few extras you may consider for your Minnesota investment. These include:
- Flood Insurance: Food insurance isn't usually in standard policy packages. Many companies offer this extra as a separate policy from the National Flood Insurance Program (NFIP). Others go for private insurers. Flood insurance is a great addition to your policy even if you don't live in a high-risk area.
- Sewer Backup Policy: This add-on protects your property if you have any problems with your sewer/water backup. Keep in mind that this isn't included in standard policies.
- Umbrella Policy: Umbrella insurance can be an extension of your liability coverage. It helps you cover legal expenses or medical bills if someone gets injured while on your property. Sometimes, the liability coverage offered by insurance companies isn't enough, so this could be a great addition to consider.
What Are the Most Common Insurance Claims in Minnesota?
The most common home insurance claims in Minnesota are related to weather events. These perils include:
- Flooding/Water Damage
- Hail
- Wind Damage
Most home insurance companies in this state will cover damage that comes from hail, water, or wind. However, remember that standard policies don't include coverage for flooding damage.
How to Find the Best Minnesota Homeowners Insurance Companies
It's normal to struggle to find a good home insurance company in Minnesota. You may get overwhelmed with all the options out there.
There are companies that have been around for decades and have a good reputation. Other companies may be newer but more modern. Which one should you pick? It all comes down to your needs.
You can never pick a home insurance company based on someone else's case. Everyone has particular circumstances, so if you want to protect your investment in the best way possible, keep reading this section. We'll give you a few tips on how to find the perfect company.
Consider the Location
You'll get different quotes depending on your state, city, and ZIP code. If you live in a place where a natural disaster is less likely to affect your home, for example, you may get a better premium.
Evaluate Your Home's Features
The current state of your home could play a role in how much you'll spend on your premium. The safer your home is, the less likely you are to get a higher premium. You can make a few upgrades to increase your chances of getting a better premium, such as installing home security systems or upgrading your roof.
Compare the Quotes You Get
As mentioned previously, your premium will vary based on different factors. Not all companies focus on the same things when calculating your rate, so the best thing you can do to get the best deal is to compare quotes. Once you compare different quotes with the same coverage, you'll be able to find the most affordable option.
Evaluate Whether You Need a Low or High Deductible
The higher your deductible, the lower your insurance premium will be. Even though a low deductible may seem like the more appealing option budget-wise, you'll still spend more money in the long run. Evaluate your needs and goals, and pick a deductible you can deal with for a long time.
Look for Discounts
Most home insurance companies in Minnesota offer discounts to encourage you to get your policy with them. You may get a discount for bundling policies, setting up automatic payments, upgrading your home, and more.
What Are the Best Home Insurance Companies in Minnesota?
If you're thinking of investing in Minnesota real estate, you must go for the best insurance companies on the market. There are dozens of them in 2023, so which ones can you choose?
We made this task easier for you by creating a list of our top five home insurance companies in Minnesota. If you're interested in one of them, feel free to reach out and get a quote.
#1 - Allstate
Allstate is one of many people's top picks when it comes to homeowners insurance in Minnesota. Besides offering a wide range of insurance products, it also comes with plenty of discount options and features that will save you from a few headaches.
Coverage and Features
The best thing about Allstate is that you have several options to make the most out of your policy. There are also "extended coverage" options that other providers limit, so you could get some extra protection for your property.
Allstate's basic package offers most of the things you need to get started, including coverage for:
- Dwellings and Unattached Structures
- Personal Property
- Personal Liability
- Loss-of-use
- Medical Payments
- And more
You can get Allstate's "Enhanced Package" if you feel like you want more. This package offers three benefits:
- Deductible rewards
- Discounts in your annual renewal rate (Claim-free Discount)
- Maintaining your premium after filing a claim
Finally, you can consider plenty of add-ons for your policy, including:
- Yard/Garden Coverage
- Identity Theft Protection
- Water Backup Coverage
- High-value Item Coverage
- Business Property Coverage
- Electronic Data Recovery Coverage
- And more
Discounts
Allstate's average annual premium is $1,660 according to NerdWallet.
Remember that you can get a different premium depending on what you add to your policy. You can also consider the following discounts to try and get a lower rate:
- Bundling different policies (i.e. home and auto insurance)
- Installing protective devices
- Signing early
- Buying a new home
- Setting up automatic payments
- Extras (Claims-free, welcome, and loyalty discounts)
#2 - American Family
American Family offers homeowners insurance coverage in 19 states, including Minnesota. A great benefit of this company is that it allows you to customize your policy with many interesting add-ons.
Coverage and Features
Even though this insurance company isn't available in as many states as other options on the list, it still has a great reputation.
The average insurance package may come with the following protection options:
- Dwelling and Unattached Structures
- Personal Property
- Personal Liability
- Loss-of-use
- Medical Payments
If you want to take things one step further, you can also consider:
- Protection for home-based businesses
- Water backup/Sump pump protection
- Equipment breakdown protection
- Service line coverage
- Senior living liability protection
- And more
Discounts
In 2023, the average annual premium for American Family is $1,980. This is slightly higher than the national average. Remember that this price is only for reference; you could get different prices depending on what you want.
The discounts are American Family's best feature. Some of the options you have here aren't available in other companies, so you could use this to your advantage.
You can get discounts for:
- Installing smart technology in your home
- Having a home that's 15 years old or younger
- Being 18-30 years old and having parents as active American Family policyholders
- Having multiple policies from American Family
- Setting up automatic payments or making paperless payments
- And more
#3 - State Farm
State Farm is known for being the largest home insurer in the United States. It operates in almost all states and offers a wide range of coverage options for you to choose from.
Coverage and Features
People can customize their State Farm policy with almost any add-ons they can imagine. The standard insurance policy may include protection for:
- Dwellings and Unattached Structures
- Personal Property
- Personal Liability
- Loss-of-use
- Medical Payments
You can also increase your dwelling limit if you insure your property to its estimated replacement cost. This feature extends your coverage by up to 20%. What this does for you is that it can help you get full replacement cost coverage (and sometimes even more).
If those features aren't enough, you can still add many extras like:
- Identity theft protection
- Earthquake coverage
- Liability coverage for nursing workers
- Liability coverage for personal injury claims
- Service line coverage
- Home system breakdown protection
- And more
Feel free to ask your insurer about the complete list of extras you can add to your policy. Remember to also ask about potential limitations and exclusions before choosing any add-ons.
Discounts
The average annual premium for State Farm is about $1,500. This is, by far, the lowest average premium compared to the national average. You could get the best deal out of this company if it fits your needs.
Unfortunately, the company doesn't offer as many discount options as the rest, but there are still a few options available:
- Bundling policies
- Installing protective systems
- Reinforcing your roof
- Reinforcing your home with wind mitigation features
#4 - Farmers
"Farmers" is also an excellent homeowners insurance company if your goal is to get customizable coverage. The company has been operating since 1928, and it has a great reputation among policyholders across the country.
Coverage and Features
Working with Farmers is easy since it offers a great website/app experience for people who want to manage their claims. The best benefit of this company is that you'll get a bit more with your standard insurance package compared to other companies.
Your basic policy can include protection for:
- Dwellings and Unattached Structures
- Personal Property
- Personal Liability
- Loss-of-use
- Medical Payments
However, your basic policy could also include two essential perks that other companies don't offer:
- Extended Replacement Cost Coverage: It pays a particular percentage above your dwelling coverage if the property gets destroyed and the rebuilding costs exceed your policy limit.
- Personal Property Replacement Cost Coverage: It reimburses you for the full cost of your destroyed/damaged belongings.
As with the rest of the companies mentioned here, you can add many extras like:
- Eco-rebuild
- Identity theft protection
- Personal injury coverage
- High-value item coverage
- Homeshare coverage
- Service line protection
- Water backup/Sump pump protection
- Declining deductibles
- Claims forgiveness
- And more
Discounts
Farmers has one of the highest average annual premiums on this list. It's currently $2,190, which is considerably higher than the national average.
Besides the discount options we've already mentioned like the declining deductibles and the claims forgiveness, you can also get discounts for:
- Installing security and safety devices in your home
- Bundling your policy with another one
- Going paperless
- Having a new home that's less than 14 years old
- Paying your bills on time
- Installing smart home devices
- Reinforcing your roof
- Reinforcing your property's foundation, walls, or windows
- Getting a "Green Certification"
- Renting to own
- And more
#5 - Country Financial
Country Financial is known for having a more "traditional" approach to your quoting experience. If you want to have access to more coverage plans or like talking to an agent in person, this may be the right option.
Coverage and Features
This insurance company offers three packages for home coverage:
- Standard Insurance: It protects your home and personal belongings from certain perils, including smoke, theft, smoke, and fire damage. However, it won't provide coverage for any other peril or disaster that's not listed in your policy.
- Premier Home Insurance: It covers perils that aren't specifically excluded from your policy. You can also expect a few extras like protection from paint spills and countertop burns.
- Combined Home Insurance: It offers standard coverage for your personal belongings and premier coverage for your property's structure.
Regardless of the package you get, there are a few add-ons you can consider:
- Water backup coverage
- Personal property replacement cost coverage
- Earthquake protection
- Flood insurance
- Identity theft protection
- High-value item coverage
- Personal injury coverage
- And more
Discounts
The average annual premium for Country Financial is $2,067 for $200k in coverage limits.
You can get different discount options depending on the state you're in. These are some of the discounts to expect:
- Staying claims-free
- Being a new customer
- Having new electrical wiring
- Installing protective devices
- Reinforcing your roof
- Setting up automatic payments
- Bundling policies
- Paying your policy in full
Make sure to ask your local agent for more information about what insurance discounts you can get. You may save a ton of money this way.
Are There Any Other Insurance Companies to Consider in Minnesota?
The five Minnesota home insurance companies we mentioned above aren't the only options out there. If you don't feel convinced by any of them, there's no need to worry. There are plenty of other options that could suit your needs.
Here are a few other home insurance companies in Minnesota that also offer great policies:
- USAA
- Chubb
- Amica
- Nationwide
- Liberty Mutual
Conclusion
Minnesota is one of the safest and most convenient states you can invest in. Even though you're not exposed to as many hazards as in other areas, you should still try to protect your property with insurance.
A great insurance policy will take all stress off your shoulders, meaning you'll be able to focus on other important things from your investment. Whether you're planning on living in Minnesota or renting the property to someone else, you need an insurance package to back you up.
The five options we mentioned here are among the top-rated options nationwide, so you can rest assured that your investment is in good hands. However, feel free to compare different homeowners insurance policies and pick the one that suits your budget and needs the best.
We hope this article has helped you make a more informed decision. Get ready to invest in real estate the right way.
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