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MINNEAPOLIS (WCCO) — The Insurance Federation of Minnesota says back in 1998, the state ranked 36th in the county for homeowners insurance costs. By 2015, Minnesota jumped to number 14.
On June 11, 2017, a hailstorm blew through the northern suburbs of the Twin Cities, leaving behind $3.2 billion in damage. It’s by far the most expensive storm in Minnesota history, but certainly, at least lately, not entirely uncommon, says Mark Kulda with the Insurance Federation of Minnesota (IFM).
“We’re seeing stronger storms, they’re more severe, they’re more frequent, they’re more intense, and that’s causing an increase in claims costs, and because the claims costs are going up that means premiums are going up,” Kulda said. “We’re not the experts in why what’s happening is happening but we are the expert in what is happening and what is happening is these storms are increasing and we’re paying the price for that.”
According to the IFM, premiums generally used to be below average, but now they’re above average. Average homeowners insurance premium rates in 1998 were $368, and by 2015 they were up to $1,348 — more than a 360% increase in 17 years.
Kulda said he thinks the flip switched in 1998. Total insured losses in Minnesota that year were $1.5 billion — more than the previous 40 years combined. And it’s been rocky since.
(credit: CBS)
“We see almost every other year, we see a billion-dollar storm loss and so those add up,” Kulda said. “That really racks up how much you have to charge in premiums to make sure that you’re covering the claims.”
Scarce labor and rising material costs push prices higher, but there are things you can do to lower costs. Kulda says shop around for your insurance, as the marketplace is competitive. And if a construction company knocks on your door after a storm, get a second or third quote from a local company.
“Get a bid to compare what these storm chasers are charging and you’ll see that the prices are much, much different,” Kulda said. “Because insurers have to pay those inflated costs. That means consumers are policy holders are paying higher premiums because of these storm chasers.”
This month, FEMA changed its flood insurance guidelines. It’s possible you could get coverage for a different price than you’ve been quoted in the past. Check with your insurance agent, as things like flash floods are not covered in a homeowner’s policy.
Source: CBS Minnesota
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