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Commerce Commissioner urges Minnesotans to Complete Insurance Check-Up and Update Coverage

October 11, 2013

For Immediate Release:

SAINT PAUL, MN – The Commerce Department reminds Minnesota consumers to take time to conduct an annual insurance check-up to assess their coverage needs and to ensure that their current policies effectively protect their valuable possessions. Life insurance protects your loved ones, auto insurance protects your car, health insurance protects your good health and homeowners insurance protects your possessions. As with any insurance purchase, it’s important to evaluate coverage and research your options to find the best coverage to fit your needs and family budget. 

“Don’t wait until it’s too late after loss or damage, the Commerce Department is here to help to give consumer tips and information on ways to save money while getting good value and insurance coverage,” said Commerce Commissioner Mike Rothman. “Consumer information and protection is critical to help Minnesotans make important choices about their insurance needs.”

Here are some tips to help save money on your homeowners insurance:

Step One: Create a Home Inventory 

Creating a home inventory can help determine coverage needs.  And, it can be as simple as downloading the myHOME on your smart phone or printing out the home inventory checklist from Commerce’s website. This is one of the best ways to make sure your possessions are fully protected is to document them with a home inventory. Home inventories are invaluable if your home is hit by a disaster – filing claims and receiving payments to rebuild occur much faster with an up-to-date home inventory.

Step Two: Shop Around!

Homeowners insurance can be costly, but it is necessary. The premiums charged for homeowners insurance can vary widely from company to company, so it pays to take the time and effort to shop around to get the best value for your insurance dollar. There are 138 companies offering homeowners insurance competing for your business in Minnesota. Annually, consumers should inventory their assets to ensure the coverage level is still adequate. 

The cost of homeowners insurance depends on a number of factors including: location; age and type of building; the use of the building, i.e., residence and/or commercial enterprise; local fire protection; choice of deductibles; application of discounts; and the scope and amount of insurance coverage you purchase.

Step Three: Go with the Company that Offers the Best Deal That Fits Your Needs.

Once you’ve considered the alternatives and chosen the company that fits your needs, consider multiple policies with that company. Some companies offer what is called a multi-policy discount. If you purchase your homeowners and automobile policies from the same insurer, you may receive a small discount.

Step Four: Understand your Insurance Options and Needs - What Type of Homeowners Policy do you Need? 

Basic homeowners insurance policies have different coverage and policy language, which is important to discuss with your insurance agent.  The five homeowners “package forms” offered to owners of single family, owner-occupied homes are referred to as HO-1, HO-2, HO- 3, HO-3 with HO-15 and HO-8.  Visit the Homeowners Insurance Basics on the Commerce website to find out what is covered in each policy.

Also, don’t forget to check whether renter’s insurance, mobile home policies, and condo owner’s policies fit your specific needs.

These policy forms insure your home and belongings against at least 11 named perils. Generally, the more perils your policy covers, the more you will pay for the policy.

What is Replacement Cost or Actual Cash Value?

As you shop around for homeowners insurance, one important factor to consider when shopping is whether your policy covers “actual cash value” vs. “replacement cost” coverage. While it may not affect your short-term premiums, it may make a large difference if you submit a claim.

Actual cash-value coverage will reimburse you for the cost of the property at the time of the claim, minus your deductible. It is important to account for depreciation when considering this coverage option. For example, if you lose an audio system that was purchased five years before the claim, you will be reimbursed for the current value of the system. This may result in a lower claim payment than you expect. 

Replacement cost coverage will reimburse the full value of the new audio system — typically, after you purchase the new system and submit receipts. While the up-front cost is greater, you need to understand and decide which coverage is right for you, particularly if you want the claim to play for replace of your possessions.

Does Changing my Deductible Level Make Sense?

If your policy contains a standard “all peril” deductible, of $250 for example, you would collect the amount of any covered property loss, minus $250. By having a deductible, the premium cost of your policy is lower than if you did not have a deductible. When choosing the deductible amount, you bear the burden of loss up to the amount you feel you can afford. 

Deductibles save money because the first dollars of the insurance are the most expensive to buy. Contact your insurance company to discuss whether your deductible makes sense for your circumstances and check the Commerce website to learn about how to reduce your rates.

Step Five: Document Lifestyle Changes to Update Insurance 

During the annual insurance check-up, consumers need to indicate if their lives have changed in the past year – marriage, divorce, children, change of jobs, and becoming a senior citizen could mean that insurance discounts, or group rates are available.

Upgrades to your home could also result in a cost-savings on insurance.  Consumers should also check with their insurance company to see if it offers premium discounts for the use of dead-bolt locks, smoke alarms, fire extinguishers, sprinkler systems, and security systems. 

Non-smokers may receive reduced rates from some companies, since smoking accounts for a large number of residential fires each year.

The Commerce Department Can Help

Visit the Minnesota Department of Commerce Home & Property Insurance website for more information regarding homeowners insurance policies, claims, flood insurance, and title insurance. 

Contact the Minnesota Department of Commerce Consumer Response Team if you have questions about the law concerning homeowners insurance, your policy, how to file a claim, or if you have a complaint:

Consumer Response Team 

Minnesota Department of Commerce 


1-800-657-3602 (MN only outside metro area)