Consumer Tips

• Start by talking with an insurance agent and reviewing your coverage and consider raising your deductible.  

  • Take time to shop around.  While most insurance companies are experiencing the same losses and financial challenges, it pays to compare policy options and prices from different companies.  

  • Consider “bundling” your home and auto policies with the same insurer.  Many companies offer a discount if you buy both polices from them.  

  • Improve home security.  Many companies offer discounts for home security systems, doorbell cameras, or other ways to make your home safer.  

  • If you feel confused, contact the Insurance HelpLine.  The help line is a free service sponsored by IFM that offers non-biased answers to insurance questions. Dedicated, knowledgeable experts field questions on many types of insurance. 

• Taking time to understand what coverage you do and do not have in your policy will benefit you down the road.  

  • Ask about gaps in your coverage and how to fill them.  

  • Ask about what other coverages may be available, including higher limits or “endorsements” to your policy that might cover specific items.  

  • Inform your agent about any significant changes to your property or its value so the policy limits can be adjusted.  

  • Discuss whether a higher or lower deductible may be right for you.  

    • A higher deductible will likely lower your homeowner’s insurance premium, though you will pay more out of pocket if you need to file a claim.  

  • Ask your agent about available discounts such as those for installing a security system, bundling your home and auto policies, or maintaining a claims-free record over time. 

• Homeowner’s policy will include one of two types of coverage, or a combination of both. These determine how the insurance company calculates your payout when you file a claim: 

  • Actual Cash Value (ACV) 

    • Pays for depreciated value of your home or belongings at the time of the loss. Factors in age, wear and tear, and obsolescence, meaning you may not get enough to replace damaged items with brand-new ones. ACV means lower premiums, but you’ll receive less money for a claim. 

      • Example: Your 10-year-old roof gets damaged in a storm. A new roof costs $15,000, but due to depreciation, the insurer values your current roof at $6,000. 

      • CV policy payout = $6,000 minus deductible. 

      • You will need to pay the additional $9,000 out-of-pocket to replace the roof. 

  • Replacement Cost Coverage (RCC) 

    • Pays full cost to repair or replace your home or belongings without depreciation. RCC ensures you can buy new items or rebuild your home at today’s prices. RCC means higher premiums, but better financial protection. 

      • Example: Your 10-year-old roof is damaged. A new roof costs $15,000, and under RCC, the insurer pays the full amount (minus deductible). 

      • RCC policy payout = $15,000 minus deductible 

• Your home – Pays for damage to the home’s structure caused by covered perils, such as fire, wind, hail, and lightning.

• Other structures – Covers detached structures like garages, sheds, and fences.

• Personal property – Protects personal belongings, such as furniture, electronics, and clothing, against theft or damage from covered perils.

• Liability – Provides protection if someone is injured on your property and you are found responsible.

• Additional Living Expenses (ALE)/Loss of Use – Pays for temporary living costs if your home becomes uninhabitable due to a covered event.

• Flood Damage – Homeowners insurance does not cover flooding; separate flood insurance through the National Flood Insurance Program (NFIP) is required. Visit FloodSmart.gov for more information.

• Sewer Backup – Damage from sewer or sump pump backup is not covered unless a specific endorsement is added.

• High-Value Items – Standard policies may have limits on jewelry, art, and collectibles, requiring additional riders for full coverage.

• Neglect & Maintenance Issues – Damage caused by wear and tear, mold, or pest infestations is typically excluded.

• Business-Related Losses – If you operate a home business, standard policies may not cover business equipment or liability.

• Earthquakes & Land Movement – Damage from earthquakes, sinkholes, or landslides requires separate coverage.

Proper coverage ensures that you are fully protected against unexpected losses and won't face significant out-of-pocket expenses when filing a claim.

• Fully Rebuild After a Disaster - If your home is damaged or destroyed by fire, storms, or another covered event, your policy should cover the full cost to rebuild at today’s prices. Underinsuring means you may have to pay out of pocket for repairs after a total loss. For example, if rebuilding costs $350,000 but your policy only covers $250,000, you’ll have to cover the $100,000 gap to return your home to its pre-loss condition. You may have to take out loans or deplete savings to cover the shortfall.

• Protect Personal Belongings - While your furniture, electronics, clothing, and valuables are typically covered, high-value items like jewelry or collectibles may need additional coverage.

• Lawsuits and Liability Risks - If someone is injured on your property, you could be sued for medical expenses, lost wages, and legal fees. Standard policies provide $100,000–$300,000 in liability coverage, but lawsuits can cost much more. For example, if a guest slips on your icy driveway and sues for $500,000, but your policy only covers $300,000, you could owe $200,000 out of pocket.

An annual review is the best way to ensure your policy reflects current risks and coverage needs.

• Discuss whether your current coverage is enough to rebuild your home in the event of a loss. Your homeowner’s policy will include one of two types of coverage: Actual Cash Value (ACV) or Replacement Cost Coverage (RCC). These determine how the insurance company calculates a payout when you file a claim. ACV pays for the depreciated value of your home or belongings at the time of the loss, while RCC pays the full amount needed to rebuild from the ground up at today's construction and labor prices.

• Evaluate your personal property coverage to ensure adequate protection. Personal belongings are typically covered for 50%-70% of dwelling coverage, but high-value items like jewelry, electronics, and collectibles may require additional policy “riders.”

• Make sure you have enough liability protection, as standard policies may only offer $100,000-$300,000 of coverage. That might sound like a lot but it might not be enough in the event of a lawsuit. For example, if a neighbor sues you for $500,000 after slipping on your icy driveway, your standard homeowner’s policy with $300,000 in liability coverage could leave you responsible for the remaining $200,000, making it wise to boost your limits or add umbrella insurance for extra protection.

• Identify potential gaps in coverage by reviewing common policy exclusions. For example, standard homeowners’ insurance does not cover floods or sewer backups, meaning separate policies or endorsements may be needed. Given Minnesota’s unpredictable weather, homeowners should check if they need flood insurance through the National Flood Insurance Program (NFIP). Visit FloodSmart.gov for more information.

• Because claims costs have increased, insurers have had to increase home insurance premiums. Consider shopping around for competitive rates and explore options like higher deductibles or bundling policies while maintaining adequate protection against escalating claims expenses.

Knowing what’s covered and what’s not under your homeowners policy prevents surprises if you have to file a claim. An annual conversation with your insurance agent is important, especially with winter storms around the corner. Here are several questions to ask your insurance agent now:

• Are ice dams and roof leaks covered, or only if there’s interior damage?Policies often cover resulting damage (like water stains, ruined drywall, or flooring) from an ice dam, but not always the cost to prevent or remove the ice dam itself. Ask what’s covered and what’s not.

• If a tree or heavy snow damages my home or garage, what does my policy pay for? Many policies cover repairs to the structure and sometimes a limited amount to remove fallen trees. Ask about limits for debris removal and whether detached structures (garage, shed, fence) are covered the same way.

• Are there any winter-related exclusions or maintenance requirements I should know about? Some claims can be denied if the insurer believes damage was caused by neglect (e.g., not maintaining heat, ignoring known leaks). Ask what winter maintenance they expect so you don’t accidentally put coverage at risk.

• If a pipe bursts, what’s my deductible? Your deductible is the amount you pay out of pocket before insurance kicks in. Ask your agent what dollar amount applies to water damage claims and whether it’s different from your standard deductible. For example, you may have a special wind/hail deductible that is a different amount.

• Do I have coverage for water backup/sump pump failure? A typical policy does not cover water that backs up through sewers, drains, or a sump pump. Ask if you have this endorsement now, what the coverage limit is, and whether it’s worth increasing that limit.

• How does loss-of-use/additional living expense work if we have to move out during repairs? Loss-of-use (or Additional Living Expense) helps pay for extra costs like a hotel or short-term rental if a covered loss makes your home unlivable. Ask what triggers this coverage, what the daily or total limits are, and how long benefits can last.

• Take steps to prevent frozen pipes and safeguard your home during cold spells.  

  • Keep the heat on. Maintain an indoor temperature of at least 55°F, even if you are away from home.  

  • Let faucets drip. Allow cold and hot water to trickle from at least one faucet during extremely cold weather to keep water moving through the pipes.  

  • Open cabinet doors. Open cabinets under sinks in the kitchen and bathroom to let warm air circulate around plumbing, especially if they are located on an exterior wall.  

  • Insulate pipes. Use pipe insulation or heat tape to protect exposed pipes in unheated areas like basements, crawl spaces, attics, and garages.  

• If you do experience damage caused by freezing pipes, take immediate action.   

  • Turn off the water. If a pipe bursts, turn off the main water supply immediately to minimize damage.  

  • Document the damage. Take photos of any damage before starting cleanup or repairs.  

  • Contact your agent or insurance company as soon as possible to begin the claims process. 

• Don't rush to sign repair contracts.   

  • Do your homework, deal with reputable contractors and get references.  

  • Check the licensing status of any contractor with the Minnesota Department of Labor and Industry.  

• Be wary of unlicensed, unauthorized, and potentially fake companies and individuals that try to sell you “package protection coverage” for lost, stolen, or damaged packages.  

• • Unlicensed entities are not legally allowed to sell insurance products and may claim these products are warranties, guarantees, or protection plans.  

  • Often, these illegitimate companies and individuals will take your payment but won’t give you the protection you paid for.  

  • If this happens, your state’s department of insurance (DOI) may not be able to help if the company or person is not licensed by your state’s DOI to sell legitimate insurance.  

• Unoccupied homes are more vulnerable to break-ins when families are away.  

• Thieves often target homes that show signs of being empty, such as piled-up mail or dark windows at night. Prevention tips:  

  • Lock all doors and windows and set your home security system when you leave.  

  • Ask a neighbor to keep an eye on things while you are gone. Have the post office hold your mail and stop all deliveries.   

  • Use timers for lights and avoid posting vacation updates online until you return.   

• Preparing the outside areas of your home can help you limit risk. 

  • Clear your gutters so water is able to flow away from your home.   

  • Check your sump pump on a regular basis and consider a battery-backup system in case the power goes out.   

    • Remember: Homeowners insurance does not cover flooding; separate flood insurance through the National Flood Insurance Program (NFIP) is required. Visit FloodSmart.gov for more information.   

  • Sewer Backup: Damage from sewer or sump pump backup is not covered under a standard policy unless a specific endorsement is added. 

  • Tree Maintenance. Your home should be at least a full-grown tree’s height away from the base of any tree, usually about 40 feet away. 

• Backyard barbecues and fire pits are summer staples, but they’re also a leading cause of summer house fires and liability claims.  

  • Gas grills account for the majority of incidents, often due to leaks, improper cleaning, or placement too close to structures.  

  • Prevention tips:  

    • Place grills and fire pits at least 10 feet from any structure, including homes, garages, and decks.  

    • Never leave fires unattended, and keep a hose or fire extinguisher nearby.  

    • Ensure coals and embers are fully extinguished before walking away.  

    • Propane tanks for grills should be stored outdoors, in a well-ventilated area, and away from heat and ignition sources. 

• Warm weather means more time outdoors, and more risk of injury, especially for kids. Many of these accidents occur at home and can lead to expensive liability claims under homeowners insurance. Prevention tips:   

  • Install fencing and self-latching gates around pools.   

  • Use safety nets and padding on trampolines.   

  • Regularly inspect equipment for wear, secure it to the ground, and supervise children during use. 

In Minnesota, insurers paid an estimated $589 million in 2024 for “water damage and freezing” claims, many of them involving burst pipes, ice dams, and other winter-related problems. Nationally, frozen and burst pipes account for about 22% of all homeowners insurance losses, according to the Insurance Information Institute.

• Start by removing leaves and debris from gutters so melting snow can drain instead of backing up and refreezing at the roof edge causing ice dams and ceiling leaks. If you’ve had ice dams before, ask a roofing or insulation contractor about long-term fixes like added insulation.

• Keep your home at least 65°F, add insulation in attics/basements/crawl spaces, and wrap exposed pipes, especially in garages and along exterior walls.

• Know where your main water shutoff is so you (or a plumber) can quickly stop the flow if a pipe bursts; water/freezing losses are among the costliest winter homeowners claims.

Take steps to keep you and your family safe when temperatures drop and the need to heat Minnesota homes increases.

• Have your furnace professionally serviced and clear any lint or debris from exterior furnace and dryer vents.

• Make sure all space heaters are three feet away from anything that can burn and never use them to dry gloves/boots/clothes. Plug heaters directly into the wall – never use extension cords or power strips – and turn off when leaving the room or sleeping.

• Check and replace batteries in smoke alarms at least twice a year, including now that the heating season has begun.

There were 228 home heating fires in Minnesota in 2022, 60% of which started in a fireplace or chimney. A few simple fireplace and chimney precautions can make a big difference in preventing fire damage and danger.

• Get a yearly chimney inspection and cleaning before winter use to prevent creosote and blockages, and burn only dry, seasoned hardwood (no trash, wrapping paper, or wet/green wood).

• Keep a three-foot clear zone around the fireplace, use a screen or closed glass doors to stop sparks, and build smaller fires rather than overloading the firebox.

• Put ashes in a metal, lidded container outside (never in garage or on a deck) since they stay hot 24–72 hours.

The National Weather Service says Minnesota homes are at higher risk for carbon monoxide buildup during winter, when the heating system is in use and the home has been sealed and insulated against the cold.

• Carbon monoxide can accumulate from wood stoves, fireplaces or charcoal grills, furnaces, water heaters, boilers, gas cooking stoves and clothes dryers, gas or kerosene space heaters and automobile exhaust.

• Install carbon monoxide alarms on every level and near bedrooms and never run vehicles or generators in an attached garage.