Minnesotans have recently been experiencing significant increases in premiums for homeowner and auto insurance. Four factors are primary drivers for those rising costs: 

Extreme weather

• Extreme weather events that cause at least a billion dollars in property damage are happening with increasing frequency in Minnesota and across the country.  It is a sign of how climate change is impacting Minnesotans. The Minnesota Department of Natural Resources Climate Journal has a chronology of significant Minnesota weather events.  
• The year 2022 was Minnesota’s costliest storm year yet, with $6.3 billion in property damages from extreme weather events, such as windstorms and hailstorms. A hail storm on Aug. 11, 2023 was another storm that caused over $1 billion in property damage.
• In response to more billion-dollar property damage events, the insurance industry has raised premiums and raised deductibles to help cover costs. Some companies have reduced coverage to help keep premiums lower. 

Reinsurance costs

• Insurance companies buy their own form of insurance, called reinsurance. This helps companies protect themselves and their members from major catastrophes.
• Reinsurance costs have risen significantly and have also been driven by extreme weather that has caused property damage events of a billion dollars or more.
• Many reinsurers are also having to adjust what they cover.   

Labor and supplies

• When homes or autos are damaged, the costs to repair or replace have increased significantly. 
• Higher labor and supply costs are due to multiple factors in the economy, such as shortages of labor and longer waits for supplies, inflationary pressures, and other economic conditions across the U.S. and around the world that have driven up costs.   

Be prepared  

The Minnesota Department of Commerce encourages Minnesotans to be prepared in case of disaster and reduce your risks. 

Review, at least once each year, the policy changes and coverage for your insurance for home, auto and other property.   

Check with your insurance agent or company about whether you have adequate insurance to cover risks of loss. For example, does your insurance cover actual cost or replacement for your home or auto?  

More info:  Minnesota Commerce Disaster Information Center

Recent news about rising insurance rates for property 

Star Tribune (Feb. 24, 2024): Ramstad: More storms, higher costs pose a threat to Minnesotans and property insurers 

Minnesota Public Radio (Feb. 15, 2024): Minnesota lawmakers try to drive home climate effects on house insurance costs  

KARE11-TV (Jan. 8, 2024): As 2024 begins, rising auto and home insurance rates remain major concern 

Get updates and news from the Minnesota Department of Commerce  at mn.gov/commerce or @MNCommerce on social media.