If you need help interpreting what your homeowner’s policy covers, don’t worry. You are not alone.
In fact, according to a 2020 poll involving 1,000 American respondents, only 3 in 10 understood their home insurance policy and what they cover. As a result, they might be overpaying for coverages they don’t need or are terribly underinsured.
For instance, following the tornadoes that leveled communities in St. Peter and other Minnesota suburbs, residents were shocked when they received less than expected. They failed to consider that the computed amount was based on the depreciated property loss value.
But you do have the advantage that your grandparents didn’t enjoy.
And that’s the beauty of the Internet because you can perform due diligence before finalizing the shortlist of insurance companies to vet.
What is Homeowner’s Insurance?
Before anything else, it’s best to start with a definition.
A homeowner’s insurance is your fail-safe protection in case of damage or losses to your residential property, including the assets inside the house. Your policy typically covers interior and exterior damage, loss or damage to your belongings, or personal injury while inside your dwelling.
Like most states, Minnesota has no law requiring residents to obtain homeowner’s insurance.
However, you also have no choice if you are financing your home since lenders won’t entertain your mortgage application without dwelling or liability coverage.
How Much Does Homeowner’s Insurance Cost in Minnesota
Multiple factors determine the cost of your premium, including the following:
- Outstanding mortgage — You can get favorable rates if you are mortgage-free on your property.
- Home location — If your house sits near the coast, it will likely drive up your premiums since your home is prone to flooding or water damage. Similarly, expect to pay more insurance if your neighborhood has a high crime rate or you live far from a fire station.
- Home’s age — Of course, it makes sense that the older your home is, the more expensive it is to maintain. As a result, you may file for more claims compared to the owner of a newer house.
- Property size — A 2,000-square-foot property is cheaper to secure than a 4,000-foot house since your homeowner’s insurance will have more to repair or replace in case of damage.
- Policy deductible — The higher your deductible or out-of-pocket cost, the lower your premium will be.
- Recent renovations — As you introduce more additions to your home, it also means more items to be covered by your insurer.
Also, you must be mindful of your credit score, which will affect your homeowner’s premium. Your credit score reflects your financial standing. So, if you have a poor rating, the insurance company absorbs a higher risk level.
What Does My Minnesota Homeowner’s Insurance Cover?
Minnesota insurers offer various policies for homeowners since each one is tailored to your specific needs. So, whether you live in Duluth, Minneapolis, St. Cloud, or Bloomington, your policy may differ from your neighbor.
Nevertheless, almost all Minnesota homeowner’s insurance policies cover the following:
- Dwelling — The protection includes the interior and exterior building, including the attached structures. Typically, your plumbing and wiring systems are also covered. The minimum coverage represents about 80% of your home’s replacement value.
- Assets — Your homeowner’s policy also includes your personal belongings, like appliances, furniture, clothing, electronics, etc. However, there’s a coverage ceiling on how much you can claim. Talk to your insurance agent about possibly including a “floater” to protect your prized possessions.
- Liability — Your policy will cover expenses associated with a lawsuit or claim from someone who sustained an injury inside your property.
- Loss of dwelling — The homeowner’s insurance will kick in if you are displaced from your home due to repairs, hurricane damage, or other circumstances outlined on your policy.
- Guest medical — The insurance policy will kick in once someone sustains an injury while on your property. The insurer will then cover the cost of medical procedures like surgery, laboratory work, hospital stay, dental, and ambulance service.
Optional Add-Ons for Your Homeowner’s Insurance
However, you can choose optional coverage to ensure maximum protection. Among the add-ons that you can access include the following:
- Mobile/manufactured home coverage — You must clarify with your insurer which items, damage, or loss will be reimbursed. For instance, among the riders on your basic policy are identity theft restoration, water damage, sports and musical equipment, yard and garden, electronic data recovery, and green improvement remuneration.
- Flood insurance — You can purchase a National Flood Insurance Program from a Minnesotan insurance agent. According to estimates, an inch-high flood will cause $25,000 in damage. The add-on policy will cover floodwater damage. The optional coverage secures both your building and your personal assets.
- Personal umbrella — This rider will protect you after exceeding your liability claim limits. Instead of risking bankruptcy, you simply add a few dollars from your regular payments for that extra peace of mind.
Peace of mind comes at a cost, but it’s not as expensive as you think.
You can protect your home and your loved ones by securing homeowner’s insurance from your local Minnesotan agent. If you already have one, it’s always a good idea to talk to your agent and revisit your policy to keep up with your new circumstances.
It’s important to consult with your Bialke Insurance Agency team again when your family grows, you get a promotion at work or have a change in your career, you’ve remodeled your home, if you install a swimming pool, when your child graduates from college, if you retire and downsize your home, or any other major milestones.