Minnesota Homeowners Insurance Claim-Loss Problems

Minnesota was the third worst profitable homeowner’s insurance market in the nation for the decade that ended in 2008. Only Mississippi and Louisiana were worse. Insurance companies lost money in 8 of the last 10 years. What are the causes? Bad Weather:

Hail Storms
Wind Storms
Tornados
Pipe Bursting Cold
Severe Snow

Overall insurance carriers posted a 19.3% annual loss for the decade. In 2008 the statewide loss ratio for homeowners insurance was 157.3% up from 123.9% in 2007 and 83.6% in 2006. This is a bad trend for homeowners in Minnesota. Look for significant increases for homeowner’s insurance premiums. If the loss ratio trending continues not only will rate increases be in store but major reductions in coverage will occur. Although I am not confident the loss ratio trending will change let’s all hope it does!