Home Insurance Explained for Minnesota Homeowners: Rates, Deductibles & Savings Tips

Home Insurance Doesn’t Have to Be Confusing

Buying a home is exciting, but when your insurance premium jumps or your policy uses unfamiliar terms, it can feel overwhelming fast.

That’s why we sat down with Sadie Murphy of North Central Insurance, a local Minnesota insurance agent, to break down what’s really happening with home insurance rates, deductibles, and coverage options, in plain English.

👉 Watch the full video here:
Expert Insurance Insights with Sadie Murphy: Home Rates, Deductibles & Money Saving Tips

Key Takeaways for New Homeowners

• Home insurance rates are rising across Minnesota due to more storm-related claims
  
  
• Your deductible might be a flat dollar amount or a percentage
  
  
• “Material matching” coverage can matter a lot after storm damage
  
  
• Bundling and home updates can help lower your premium
  
  
• Talking to a local agent can uncover savings you didn’t know existed
  
  

Why Did My Home Insurance Rate Go Up?

This is one of the most common questions homeowners ask, and for good reason.

According to Sadie, Minnesota has seen a big increase in wind, hail, and storm-related claims over the last several years. Insurance companies are paying out more in claims than they collect in premiums.

In simple terms:
For every $1 insurance companies collect, they’re paying out close to $2 in claims.

To manage that risk, companies adjust:

• Premiums
  
  
• Deductibles
  
  
• Coverage options
  
  

This isn’t about one homeowner—it’s a statewide trend many Minnesota buyers and sellers are seeing.

What’s the Difference Between a $1,000 Deductible and a 1% Deductible?

Deductibles have changed a lot recently, especially for wind and hail claims.

Here’s the simple breakdown:

• Flat deductible:
  A set amount like $1,000 or $2,500
  
  
• Percentage deductible:
  Based on your home’s replacement cost, not its market value
  
  

Example Sadie shared:
If your home’s replacement cost is $300,000:

• 1% deductible = $3,000
  
  
• 2% deductible = $6,000
  
  

Replacement cost is calculated using things like:

• Home size
  
  
• Construction quality
  
  
• Number of bathrooms
  
  
• Materials used
  
  

This is why it’s important to understand which type of deductible you have before a claim happens.

What Is Material Matching (And Why Does It Matter)?

Material matching is one of the most overlooked parts of a homeowner’s policy.

Here’s why it’s important:

Let’s say a hailstorm damages one side of your home. If your siding color or material is no longer available, material matching coverage helps pay to replace all sides of the house, not just the damaged area.

Without this coverage, you could end up with:

• One side repaired
  
  
• Three sides that don’t match
  
  

Sadie recommends reviewing this coverage closely, especially on older homes or homes with discontinued materials.

How Can Homeowners Save Money on Insurance?

Everyone wants to save money, insurance agents included.

Here are Sadie’s top tips:

Bundle your policies
Combining home and auto insurance often gives a meaningful discount. Adding umbrella or recreational policies can help too.

Update major home systems
Newer items can lower risk and cost:

• Roof
  
  
• Furnace
  
  
• Water heater
  
  

👉 Important tip: Even if updates were done due to a claim, tell your agent. Claims departments don’t always notify them.

Install a security system
Many companies offer discounts, your agent usually just needs the certificate.

A Minnesota-Specific Insurance Reality

Because Minnesota homes face:

• Harsh winters
  
  
• Frequent hail and wind storms
  
  
• Rapid weather changes
  
  

Insurance policies here often look different than in other states.

That’s why working with local professionals, both your Realtor and your insurance agent, can help you avoid surprises after you move in.

Related Reading

• Minnesota Homebuyer Costs Explained: What You'll Pay Before Closing

Need Help or Have Questions?

If you’re buying a home, reviewing your coverage, or just want a second opinion, having the right people on your side matters.

We regularly connect our clients with trusted local professionals like Sadie Murphy at North Central Insurance, and we’re always happy to help you think through the big picture.

If you’re planning a move or have questions about buying or owning a home in Minnesota, reach out to First Choice Realty Solutions for guidance you can trust—no pressure, just answers.