The 5 Best Minnesota Homeowners Insurance Companies
Minnesota’s average annual premiums for homeowners insurance are right in line with the national average — $1,219 per year for an HO-3 policy, compared to $1,132 nationwide. That said, how much you’ll pay can vary a lot depending on your home’s size, your assets, and your address. Use our tool to find your best rates:
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Blizzards, tornadoes, and electrical storms might be enough to scare off some people, but Minnesotans are the types to shrug off bad weather with a smile. They know the state, home to both gorgeous lakes and thriving cities, is a wonderful place to plant your roots so long as you’re prepared for a bit of the unexpected. One non-negotiable in that department? Homeowners insurance.
The annual rate for homeowners insurance in Minnesota clocks in at $1,219, which is higher than the national average of $1,132 per year. The increased costs are likely due to the fact that insurance companies paid an average of $542 in claims per insured home in Minnesota, a whopping 24 percent higher than the country-wide average of $442. All that inclement weather doesn’t come cheap.
So what’s a Minnesotan to do? Shopping around for the right policy is essential — you don’t want to pay a premium for coverage you don’t need and your rates may vary depending on where in the state you’re located. You can use the rates tool below in tandem with our top picks for home insurance companies in the state to get started.
How We Found the Best Homeowners Insurance in Minnesota
We landed on our recommendations by first identifying the five largest insurers in the state and measuring them against a set of criteria similar to those evaluated in our national review. We studied each company’s coverage options, online resources, and customer service via phone and email. We also looked at endorsements and discounts offered as we applied for quotes in various parts of the state. Lastly, we assigned a number value to each of our data points and crunched the numbers to see how each company stacked up.
Minnesota Homeowners Insurance Company Reviews
Allstate won our top spot due to an above-and-beyond learning center, especially helpful for first-time purchasers. One of our favorite features was the Common and Costly Claims tool, which allows potential customers to see the dollar average of common claims based on zip code. Even if you don’t end up going with Allstate, it’s useful to know what to look out for in your location so you can cater your plan accordingly.
Allstate also offers a wide variety of discounts. Not only do they honor discounts that are somewhat standard across the industry such as multi-policy bundling, it also provides a 10 percent welcome discount for just signing up. What’s even more impressive is that Allstate’s multi-policy discount could end up saving you as much as 30 percent, compared to runner-up State Farm’s 22 percent.
That being said, Allstate isn’t perfect, particularly when it comes to claims management. Allstate scored lowest among 14 providers in a Consumer Report’s homeowners insurance survey, though we’re happy to report J.D. Power ranks Allstate in line with the competition in its US Household Insurance Study, which examines policy offerings, pricing, billing, payment, and more. It also scored high in our customer service evaluation, meaning the company still has plenty to offer on that front.
State Farm is one of the most popular insurers in the entire country, providing consistent customer service whether you’re living in St. Paul or Minnetonka. In fact, State Farm blew Allstate away in the Consumer Reports’ homeowners insurance survey, beating out the company by an impressive 15 points. What cinched its high score? A 4 out of 5 for damage amount certainly contributed and is a good indication that customers are satisfied with the amount of money paid out per claim.
Another strength of State Farm is its comprehensive educational materials. There is a lot of vocabulary and terminology that can sound like a foreign language for first-time buyers and the State Farm learning center empowers customers to make informed decisions about their coverage, which is always a good thing. Beyond that, securing a quote was a breeze through its online tool, though you can always talk to an agent directly if you have any questions about discounts and endorsements.
The sheer number of discounts offered by Farmers Insurance was enough to secure the company a spot in our top three picks. If keeping the cost of your premium low is a priority for you, we recommend using Farmers online quote tool to compare rates. You’ll be asked if you meet the requirements of a wide range of discounts, including one for LEED certified buildings and personal membership to certain organizations such as AAA.
Farmers does a decent job of insurance education on its website as well. Though it’s not quite as robust as Allstate’s learning center, Farmers site provides a comprehensive glossary of terms, thorough FAQ page, and clear explanation of coverage types. We also liked the Farmers iClaim app, a mobile app that allows you to begin the claims process instantly by snapping photos of any relevant damage and submitting them to Farmers directly through your phone. Filing the claim is commonly considered the most cumbersome task when issues arise, so streamlining the process ensures you can go back to living your life sooner.
When applying for coverage through American Family, we received the lowest rate for our sample home in Minneapolis. While we were excited by the prospect of saving money, the lower prices may be due to the company’s increased charges for deductibles. Property loss and hail deductions will both cost you $1000, which is something to keep in mind when considering your needs and the likelihood of certain weather events, such as hailstorms, in your area.
The company also offers a solid array of discounts for everything from going claims free for at least six years to insuring a home with an impact-resistant roof. The standard coverage will insure you against fire and lightning, windstorms, vandalism, and smoke and theft. If those coverages meet your needs, you may not need to worry about the higher deductibles of add-ons.
If you do need to report loss, you can do so through American Family’s Dream Vault tool, an online portal where you can document all the possessions you’d like insured. You record estimated worth as you log each item, which means you can rest easy that you won’t be hit with a lower-than-expected claim payment should you incur damage.
Auto-Owners Insurance Co.
Out of all of Minnesota’s top insurance companies, Auto-Owners Insurance knocks it out of the part when it comes to filing a claim. The company was ranked the third highest among 14 home insurers in the Consumer Reports reader reviews. The company also exceeded Allstate and State Farm in terms of timely payment, earning the highest rating of 5 out of 5.
So what’s the catch? Auto-Owners is a bit lacking in the educational resources department. The website is laborious to navigate and can leave you with more questions than answers, particularly if you’re new to the whole homeowners insurance industry. If you want to learn about your options, you have to enter your zip code to find the nearest local agency and get on the phone. For those who prefer to conduct their claims online, this is less than ideal. That being said, the high marks for claims processes means Auto-Owners Insurance is worth a look if a dearth of online resources isn’t a deal breaker.
Did You Know?
Catastrophic Events Hit Minnesota Particularly Hard
The word catastrophic is not meant to be alarmist, but Minnesota is home to more than its fair share of severe storms and natural disasters. In fact, from 2005 to 2013, catastrophe-related events were responsible for 54 percent of all claim payments. Compare that to the countrywide average of 37 percent of total claim payments and you can see why Minnesotans might want to look into endorsements that cover these sort of unexpected natural damages. Brownsville, Minnesota recently experienced a landslide that wreaked havoc on a local man’s home, and his insurance unfortunately didn’t cover such damages.
So what’s a Minnesota resident to do? Make sure you’re protected against all possible inclement weather, particularly flooding and hailstorms, which are the second and third most common and costly claims in the state. Wind damage, which is covered by most standard plans, takes the top spot.
Lakefront Property Will Cost You More
Reaping the benefits of the Land of 10,000 Lakes comes at a cost: higher homeowners insurance premiums. Homes located near lakes are considered to have an increased risk of property damage, hence the hit to your wallet. Another aspect to consider is the age of the home. Many vacation or waterfront properties tend to be older and may include aging systems such as septic tanks. If you plan on insuring a waterfront property, we recommend speaking directly with an insurance agent so they can walk you through the specific needs of lake homes.
You Might Be Underinsured
Even if you already have homeowners insurance, it’s important you reevaluate your policy every few years because there’s a 50 percent chance you may be underinsured. Often, first-time homeowners insure their property for the amount they paid for it. This is a common mistake, as the true cost of rebuilding a damaged home ends up being significantly higher.
Industry experts advice homeowners to make sure their premium covers the entire cost of rebuilding your property should it be entirely destroyed. To get a rough estimate of what the rebuilding costs may look like, multiply your home’s square footage with the average cost of building materials in your area.
The Bottom Line
Though Minnesota is beloved in the summer for its abundance of lakes, the harsh winters and specific hazards of waterfront properties make homeowners insurance all the more essential in the state. We recommend you add-on insurance for hail and water-related damages. To start shopping for plans, compare quotes by entering your zip code into the tool below.
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