Minnesota Home Insurance Rates Surge as Storm Damage and Industry Shifts Drive Up Costs

Homeowners across Minnesota are facing steep property insurance rate increases, with industry experts warning that relief is unlikely in the near future.

Published on January 31, 2025

property insurance
Aerial view of houses in Maple Grove, a suburban city in the Minneapolis-St. Paul metro area, Hennepin County, Minnesota, on an overcast day in Fall.

Homeowners across Minnesota are facing steep property insurance rate increases, and industry experts warn that relief is unlikely in the near future. Mounting losses from severe weather drive the surge in premiums, as do a tightening insurance market and broader economic factors influencing the cost of rebuilding and risk assessment.

Rising Costs and Shrinking Coverage

Minnesota homeowners have long viewed their insurance policies as a safeguard against unexpected damages, but with insurance rates soaring, many are now struggling to maintain affordable coverage. An independent insurance agency owner, LuAnn Paulet, noted that roof replacement costs have skyrocketed, with price tags ranging between $20,000 and $40,000.

The state has experienced a sharp increase in severe weather-related losses, particularly from wind and hailstorms. In 2023, a single storm left approximately $1 billion in claimed losses across the Twin Cities and central Minnesota. The previous year saw the most expensive storm season in state history, totaling $6.3 billion in damage.

A Market Under Pressure

Insurance companies in Minnesota have struggled to remain profitable. In 2022, insurers paid out $1.92 in claims for every $1 collected in premiums, leading many to push for aggressive rate hikes. Data from S&P Global indicates that Minnesota ranks 12th nationally in premium increases, with rates rising 39% over seven years, far outpacing inflation.

Regulatory challenges in states like California and Florida, where political pressure has kept rates artificially low, have also had ripple effects, pushing insurers to recoup costs in states with fewer restrictions. Industry experts warn that, if Minnesota’s rate adjustments fail to keep up with increasing risk, insurers may begin to withdraw from the market entirely—similar to what has already happened in California.

Growing Frustration and Uncertain Solutions

As rates climb and coverage shrinks, complaints to the Minnesota Department of Commerce have surged, doubling between 2020 and 2023. Homeowners report frustration over higher costs, increased deductibles, and reduced coverage for common weather-related damages.

Despite the challenges, Commissioner Grace Arnold emphasized that Minnesota’s property insurance rates are based on the state’s unique conditions and not dictated by national disasters. While some policyholders have turned to the Minnesota FAIR Plan, the state’s insurer of last resort, its total number of policies remains low compared to other high-risk regions.

Meanwhile, homeowners like Rena Hammes of Blaine have accepted the reality of rising costs. After experiencing nearly $100,000 in storm damage in 2017, she sees her recent 20% premium hike as an unavoidable consequence of living in an increasingly storm-prone state.

With insurers warning of further adjustments, experts suggest that homeowners should prepare for continued rate increases through at least 2026.