Hailstorms Are Driving Minnesota Homeowners Insurance Premiums — Here's What's Happening

An April 2026 MPR News report delivered a number that shouldn't have surprised anyone who's renewed their homeowners policy in the past two years: Minnesota had the largest homeowners insurance premium increase in the country. For context, that's the entire country. Not the region, not the Midwest — the United States.

And the storm that just swept across the upper Midwest from June 5 to 11 — bringing 4-inch hail to Manitoba, winds exceeding 90 mph through Wisconsin and northern Illinois, 500,000+ customers without power, and losses that Aon expects to reach into the billions — is exactly the kind of event that makes carriers look at their Minnesota exposure and raise their hand to file another rate increase.

The Hail Corridor Reality

Minnesota sits in one of the most active severe convective storm corridors in the United States. The geography that makes Minnesota beautiful — the flat terrain across the western part of the state, the transition zone between the Gulf moisture track and the northern jet stream — also makes it a target for the type of weather that insurance actuaries lose sleep over.

Severe convective storms — hail, straight-line winds, tornadoes, and related flooding — caused $51 billion in US insured losses in 2025. That was the third consecutive year above $50 billion. Over the three-year period from 2023 to 2025, SCS losses totaled $208 billion. In 2025, more than 600,000 single-family homes across the US were hit by hail 2 inches or larger.

Nearly half of all insured natural catastrophe losses globally in 2025 came from severe convective storms — more than hurricanes, more than wildfires. Minnesota is disproportionately exposed to this category. And the losses are real: carriers are paying claims, and premiums reflect claims paid.

What Carriers Are Doing in Response

Higher premiums

The most visible response. Minnesota homeowners insurance premiums have risen faster than any other state, and there's no credible expectation of a return to 2020 pricing. The trajectory has moderated somewhat — AM Best found that homeowners rate increases fell to 8.3% on average in 2025, down from higher prior-year levels — but moderation from a high base still means continued premium increases for most Minnesota homeowners.

Percentage-based wind and hail deductibles

This is the change most homeowners don't notice until they have a claim. Many carriers in Minnesota have shifted from flat-dollar deductibles to percentage-based wind and hail deductibles — typically 1–3% of the home's insured value. On a $450,000 home, a 1% deductible means $4,500 out of pocket before insurance applies to any storm claim. At 2%, that's $9,000.

This structure transfers meaningful risk back to homeowners. It's one reason why reviewing your deductible specifically for wind and hail — not just your overall deductible — matters. Standard homeowners policy reviews often focus on the base deductible and miss that a separate, higher percentage deductible applies to storm claims.

Shifting from replacement cost to actual cash value — or a payment schedule

This is a quieter change that catches homeowners completely off guard at claim time. Traditionally, homeowners insurance paid to replace a damaged roof with a new one — replacement cost value (RCV). Increasingly, carriers in Minnesota are writing policies that pay only actual cash value (ACV) for roofs, or applying a payment schedule that reduces the payout based on the roof's age.

The logic is straightforward: shingles wear out over time, the same way car tires do. A 15-year-old roof is partway through its useful life. Carriers are asking homeowners to have more skin in the game — essentially saying that if you haven't replaced a roof that's nearing the end of its life, you should be setting money aside for that replacement rather than expecting insurance to fund a full new roof whenever a storm becomes the occasion.

Under ACV, a 15-year-old asphalt shingle roof might pay out at 50–60% of replacement cost — the insurer applies depreciation for years already used. Under a payment schedule approach, the formula is spelled out explicitly: so many years old equals so many percent of replacement cost. Either way, the homeowner covers the gap.

The difference matters enormously at claim time. A homeowner who assumed they had full replacement cost coverage, files a hail claim, and receives a check for 55% of the actual repair cost is facing a significant out-of-pocket gap with no warning. Check your declarations page specifically for how roof claims are settled — look for language like "actual cash value," "roof payment schedule," or "limited roof coverage." If you're not sure what you have, ask your agent before you need it.

Non-renewals and market exits

Some carriers have reduced their Minnesota homeowners exposure — declining to write new business in certain zip codes, tightening roof age requirements, or exiting the market for properties with loss history. Homeowners with aging roofs, prior storm claims, or properties in high-frequency hail zones are experiencing the narrowest set of options in the standard market, sometimes landing in the MN FAIR Plan as a last resort.

What Homeowners Can Actually Do

Impact-resistant roofing

Class 4 impact-resistant shingles — the highest rating — qualify for premium discounts of 10–20% with most Minnesota carriers. The upfront cost is higher than standard shingles, but for a homeowner due for a new roof, the combination of discount and reduced damage likelihood often makes financial sense. Ask your agent what your carrier requires to qualify and confirm the discount is applied at your next renewal after installation.

Know your actual deductible for wind and hail

Pull your declarations page and look specifically for a wind and hail deductible separate from your standard deductible. If it's percentage-based, calculate what that means in dollar terms for your home's insured value. If you don't know your home's current insured value — which many homeowners don't — that's a conversation worth having with your agent, because the replacement cost estimate affects your premium and your coverage simultaneously.

Review roof age and condition proactively

Most carriers in Minnesota have tightened their underwriting standards around roof age. A roof that's 15+ years old is increasingly difficult to insure in the standard market. Knowing where you stand before your carrier sends a non-renewal notice gives you options — time to replace the roof, shop alternative carriers, or make an informed decision about the cost-benefit of replacement.

Shop the market after a storm season

After a significant loss year, some carriers increase rates more aggressively than others. The spread between the most and least expensive options for the same Minnesota property can be substantial — sometimes hundreds of dollars a year. An independent agent can run your property through multiple carriers and identify where the market has moved relative to your current carrier.