As people across the country are hit with a hike to their homeowners insurance premiums, a new analysis by Realtor.com projects Minnesotans will face the fifth-highest rise in rates among the 50 states by the end of the year.

That analysis shows homeowners’ insurance rates in Minnesota are projected to rise 15% by the end of 2025, and the average homeowner is expected to need to fork over more than $500 more to protect their homes.

Former Insurance Federation of Minnesota spokesperson Mark Kulda largely blames a continued increase in storms over the last couple of decades.

“All of a sudden, in 1998, someone turned flip the switch, and we had year after year after year of billion-dollar-plus storms come… Now, we have $6 billion storms in one year,” Kulda said.

“They’re stronger, they’re more intense, they’re more frequent, and it’s costing everybody more money.”

Kulda said the cost of repairs is also rising, and more so-called storm chasers continue to come to town looking to profit on construction in the wake of storms. They play a part in inflating those costs, particularly when it comes to roof repairs following hail damage, he said.

A news release from the Insurance Federation of Minnesota last year said insurers are losing money on claims. In 2022, companies paid out approximately $1.92 for every dollar they made from premiums, the release said.

According to the study from Realtor.com, Minnesota is projected to see higher rate increases than other states recently hit by natural disasters. North Carolina, for example, was devastated by Hurricane Helene last year, and North Carolinians are projected to see a 6% increase in rates compared to the 15% increase projected in Minnesota.

“If you look at the states that have the most extreme weather, California is number one, Minnesota is number two,” Kulda said.

“It’s not just, you know, tornadoes and wind damage, but it’s hail. It’s the snow loads that we get in the winter. North Carolina doesn’t have snow loads, right? But we do, and then it’s things like fire… And Minnesota has had that extreme. We’ve had areas of flooding, like in Mankato, but yet, there’s still parts of Minnesota that are under a drought.”

So what can you do?

Kulda suggests shopping around for rates from reputable companies and checking those insurers’ ratings and for any complaints against them with the National Association of Insurance Commissioners.

Minnesota also has what’s called the Strengthen Minnesota Homes program. Under it, if you build or rebuild your home to meet an official ‘fortified’ standard, you could be eligible for premium discounts.

The Insurance Federation of Minnesota was not immediately available for an interview on Thursday, but a current spokesperson provided this press release.

In Minnesota, the Department of Commerce approves homeowners’ insurance rates. They provided the following information in an email response:

Q1 – Why are hikes happening?

1. Global economic uncertainty, including on-again/off-again tariffs, affects home and auto insurance costs. 

• This is not a problem specific to Minnesota. Some states have been harder hit than Minnesota.  
• Materials used to rebuild homes and repair vehicles are more expensive due to tariffs and other global economic factors. When it costs more to rebuild, it costs more to insure. 
• Insurance markets depend on stability and predictability to offer consumers comprehensive insurance at affordable prices.  
• Minnesota’s insurance markets are competitive, allowing consumers to shop for lower premiums. 
• DATA:   
  • Major insurance carriers (All State, State Farm, other well-known brands) still serve MN 
  • Over 700 insurers licensed to offer home/auto insurance:   

2. Extreme weather is affecting more Minnesotans more often, causing rate increases. 

Climate change is here. The more frequent storms, hail, floods, and wildfires cause damage to homes and cars, which drives higher insurance rates.  

• There were 18 billion-dollar disasters in the past 3 years nationwide.
• Minnesota saw 190 hail events in 2024 alone.
• This is bigger than insurance. Commerce works with partners across the state to build climate resilience in every community.  

3. The Department of Commerce is protecting Minnesotans at every step 

• We regulate insurance companies to ensure rates are fair and companies can pay their claims. 
• If you’ve been shortchanged, we’ll help you fight back. Contact us if your claim has been delayed or denied.   
• In the last 3 years, Commerce has helped return over $10 million to consumers. 

4. Minnesotans can take steps to protect their wallets as insurance costs rise 

• Shop around — Minnesota has a competitive insurance market.
• Check your coverage at least once a year to avoid surprises.  
• Take advantage of incentives — Minnesota law requires insurers give a discount to homeowners who put a FORTIFIED roof on their home.
• Consider whether you need to purchase flood insurance—it isn’t typically covered on standard homeowner policies.
• To reduce risk, homeowners can trim tree branches that could fall on your house, remove brush near your house to reduce fire risks.  

Q2 – How/why the Department approves rates

The Department is a file and use state – Commerce does not approve rates but can challenge them if they are not actuarially justified.