ALEXANDRIA — The Minnesota Department of Commerce is receiving a growing number of complaints after storms from Minnesotans about limitations on their homeowners insurance.
In response, the department is issuing a consumer alert asking Minnesotans to review their current insurance policies and speak to their insurance agent to review their wind and hail damage coverage for any recent changes or modifications. which could take effect upon their next renewal.
The department also encourages Minnesotans to understand how much repairs can cost out of pocket and how to select a licensed, reputable contractor to perform repair work on their home.
“We want to make sure Minnesota homeowners are aware of possible changes to their homeowners’ insurance coverage and aren’t surprised after they submit a claim,” Commerce Deputy Insurance Commissioner Julia Dreier said. , in a press release. “In the past, home insurance covered all of an insured’s costs to replace a roof or siding for even modest damage caused by hail or wind, but that may have changed.”
The department has seen a nearly 20% increase in home insurance complaints since 2020. Many of those complaints come from homeowners concerned about denials of coverage or surprisingly high payouts after wind or hail damage. Some insurance companies now use policy language that eliminates coverage for wind and hail damage, except where siding or shingles are punctured or torn and no longer serve as an effective water barrier.
Some insurance policies now include a separate, higher deductible for hail and wind damage. For example, a homeowner may be required to pay a flat rate or 1% or more of the home’s replacement value before coverage takes effect. While these storm-specific deductibles are sometimes touted as a way to save money on premiums, homeowners should weigh these potential savings against the amount they might have to pay for repairs if their home were damaged. by a storm.
“We advise owners to consider the calculations,” Dreier said. “One percent may seem affordable, but it could easily become a significant expense and result in sticker shock considering the value of a typical Minnesota home.”
The Commerce Department and other insurance departments across the country are also seeing an increase in complaints from people who are not the insured. As more third parties become involved in insurance claims, Commerce recommends homeowners familiarize themselves with how claims are submitted and how to find a licensed, reputable contractor to repair damage after storms.
The Minnesota Department of Labor and Industry has
and avoid contractors who are not licensed to do business in the state or who use high-pressure or misleading sales tactics.
State law does not address policy exclusions for cosmetic damage caused by hail or wind. Changes to premiums and coverage amounts or exclusions often occur at renewal. Commerce advises Minnesotans to study their own policies for changes since their last review and ask their agent or insurer about coverage, exclusions, deductibles and policy options. Standard homeowner policies do not cover flood damage, a growing problem even in areas that are not within designated floodplains.
More information on flood insurance options is available from FEMA at
Similar trends in insurance have emerged across the country driven by increases in extreme weather and property damage due to climate change. Minnesota recorded 147 storms with large hail in 2020, seventh nationally for that year, according to the National Weather Service. In May of this year, Minnesota led the nation in severe weather with 568 occurrences, according to the National Weather Service.