Your first home in Minnesota: homeowners insurance, hail and roofs

The Consumer Financial Protection Bureau says you will need to show proof of homeowners insurance before the lender will fund the loan. That proof can be a binder: a temporary contract that puts the coverage in force from closing day until the full policy is issued. Minnesota law says a properly authorized binder is acceptable evidence of the insurance a lender requires to finance a purchase. We can bind the coverage and send the binder or evidence of insurance to your lender ourselves.

Start once the purchase agreement is signed. Ask your loan officer what the lender requires of the policy, and show them the quotes you are considering before you choose, as the CFPB suggests. Your Closing Disclosure arrives at least three business days before closing, with the premium you pay at closing listed under Prepaids, so the policy should be settled by then.

One Minnesota rule to know from day one: every applicant for homeowners insurance must be told that, for the first 59 days after a policy is issued, the insurer may cancel it for any reason the law does not specifically forbid. After that, a carrier can cancel only for the short list of reasons in state law, such as unpaid premium or misrepresentation, and it must give you at least 60 days’ notice before it declines to renew, lowers your limits or drops a coverage. It is one more reason to give the carrier the roof’s real age and condition up front.

Many lenders require an escrow account. Part of each mortgage payment goes into it, your servicer pays the property taxes and the insurance bill from it when they come due, and you make an initial deposit at closing to start it off. Escrow pays the bill; it does not choose the policy. You still pick the carrier and can change it later. The policy needs to list your lender as the mortgagee, and if you change carriers, your servicer needs the new declarations page.

When the premium changes, your mortgage payment changes with it. If coverage ever lapses, the servicer can buy insurance for you after giving notice and charge you for it; that force-placed policy is usually more expensive than one you buy yourself, and in many cases it protects only the lender. And if you have a claim, the check for damage to the house will likely be made out to you and your mortgage company together, because the lender has a stake in the repair.

The usual homeowners policy, the HO-3, covers the house against nearly every cause of damage except the ones it lists; the Department of Commerce names flood, earthquake, war and nuclear hazard as the exceptions that almost always appear. It has five parts:

A carrier cannot knowingly insure a home for more than it would cost to replace. Where a policy offers replacement cost, it has to pay to rebuild to the building code state or local authorities require, within the policy’s limits, which matters in an older house. And if your belongings are covered only at actual cash value, the declarations page has to say “nonreplacement cost.” If you see those words, ask what it costs to change them.

Replacement cost pays what it takes to repair or replace with materials of similar quality, with nothing taken off for age. Actual cash value takes off depreciation. The Department of Commerce uses a roof to show the difference: shingles that cost $10,000 to replace are 10 years into a 20-year life, so they have lost half their value. On actual cash value, the claim pays $5,000, minus your deductible. On replacement cost, it pays $5,000 first and the balance once the roof is replaced.

Some policies now treat the roof differently from the rest of the house. In a letter attached to the February 2026 report of the Legislature’s Task Force on Homeowners and Commercial Property Insurance, a member appointed by the Insurance Federation of Minnesota wrote that carriers here have been limiting roof coverage to actual cash value, based on the roof’s age and condition. Other policies use a payment schedule: a table that pays a set share of a new roof’s cost, shrinking as the roof gets older, often with different shares for different roofing materials. Schedules differ from carrier to carrier, and some carriers skip the schedule and switch an older roof to actual cash value instead. The one on your policy is the one that counts, so ask for it when you compare quotes.

Either way, the deductible usually comes off after that. After a hailstorm, the gap between a new roof and what the policy pays can be most of the claim, and it does not show up in the premium. It is the line worth reading first on any home quote.

Hail is not an occasional event in Minnesota. The DNR’s State Climatology Office says that in a typical year there may be 40 or more days when it hails somewhere in the state, and 30 to 35 days with hail an inch across or larger, the size at which the National Weather Service issues a severe thunderstorm warning. Hail two inches or larger is reported somewhere in the state on 7 to 8 days a year, on average. On May 19, 2022, according to the DNR, hail fell hard across Minneapolis and St. Paul.

Many Minnesota policies now carry a separate deductible for wind and hail, and it is often a percentage of your dwelling coverage (Coverage A) rather than a flat dollar amount. The math is plain: with a 1 percent wind and hail deductible, a home insured for $600,000 has a $6,000 deductible on a wind or hail claim. The Department of Commerce’s advice is to do the math, because a percentage that sounds small can be a large bill after a storm.

Read the damage wording too. Commerce warned in 2022 that some carriers had begun excluding wind and hail damage unless shingles or siding are punctured or torn and no longer keep water out, and that state law does not address these cosmetic-damage exclusions. The task-force member’s 2026 letter lists metal roofs and metal roof parts, gutters and windows among what these exclusions now cover.

After a storm, a residential roofer or contractor may not promise to pay any part of your deductible, directly or indirectly, as a way to win the job. Nor may it interpret your policy or adjust your claim for you unless it holds a public adjuster license. Your insurer does not have to consider an estimate from a contractor who breaks that rule.

Minnesota law does not let a carrier refuse a house, or charge more for it, solely because the house is old. It does let carriers rate the age of the parts that wear out: the plumbing, wiring, heating and cooling, or any other part of the structure whose age affects the risk of loss. Carriers treat the roof that way, and its age is one of the biggest factors in a home rate. An older roof usually means a higher premium and a roof settled at actual cash value or on a schedule; a newer one usually means the opposite.

So find out the roof’s age before you shop. Ask the seller and your inspector, and ask whether there has been a roof or siding claim and whether the money went into repairs. A policy covers only damage that happens while it is in force, so hail damage from before you owned the house is not a claim on yours, even if nobody ever fixed it.

A new or stronger roof can bring the price down. Minnesota law requires an insurer to give a premium discount or rate reduction, on a policy that includes wind coverage, once you send it a certificate from the Insurance Institute for Business & Home Safety (IBHS) showing the home meets the FORTIFIED standards with the hail supplement, a way of building a roof to hold up better against wind and hail. When you compare quotes, ask each carrier what a newer or impact-resistant roof would change.

Strengthen Minnesota Homes is a Department of Commerce grant program that helps homeowners pay to replace a roof to the FORTIFIED Roof standard. Commerce estimates the grant at $10,000 to $15,000 per home, which may not cover the whole job. Right now it is in pilot mode: as of Commerce’s October 1, 2026 update, it isn’t taking applications from the public, and Commerce says not to start roofing work expecting a future grant, because work done before approval can’t be reimbursed. The pilot is for owners of single- and two-family homes in Crow Wing, Hennepin, Morrison and Todd counties.

Water that comes up through a floor drain or overflows a sump needs coverage of its own. According to the Department of Commerce, neither a typical homeowners policy nor flood insurance covers a sewer backup or a sump pump that fails or can’t keep up. On a Minnesota homeowners policy, that coverage is a water backup endorsement added to the policy, and endorsements vary from company to company. With a finished basement, choose that limit on purpose.

Flood is its own policy. If the house is in a FEMA high-risk flood zone (a Special Flood Hazard Area) and the loan is federally backed, a federally regulated or insured lender has to require flood insurance. A federal flood policy normally takes 30 days to start, but there is no wait when you buy it while taking out the mortgage. Minnesota insurers also have to remind you every year, in writing, that your homeowners policy does not cover flooding.

The association’s master policy covers part of the building and your own policy covers the rest; where the line falls depends on the association’s documents. The Department of Commerce notes that a condo association’s insurance typically covers only the exterior walls, leaving things like cabinets, bathroom fixtures and flooring to your policy. Ask for the master policy’s summary and its deductible before closing.

Then check loss assessment coverage, which pays your share when the association charges owners for damage to property you hold in common. The standard industry homeowners form includes $1,000 of it; carriers’ own forms vary, so ask what yours includes and what it costs to raise it. And if the damage happened before you bought but the association charges the assessment after the unit is yours, Minnesota law says the policy you have when it is charged pays it, within its limits, if that policy includes loss assessment coverage.

The Department of Commerce says most companies offer a discount when you have more than one type of policy with them, and in our experience the home and auto bundle is often one of the larger discounts available on either policy. It is not automatic. Now and then two separate companies cost less than one bundle, so we price it both ways and show you the difference rather than assuming.

Home and auto are Spencer’s lines, so you will work directly with him. There is no charge: the insurance company pays us a commission, and we add no fee.