Who is covered under my policy?

You are covered by the policy in your name. Any relative living in your home, who does not have a policy of his or her own, is covered by YOUR policy. This includes a spouse, children, or a minor in your custody or the custody of a relative. A driver using your car with your permission, who is not covered by another policy, will be covered by your policy.

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What Are the Types of Coverage?

Personal Injury Protection (PIP) provides basic economic loss benefits. If you are injured in an accident, this portion of your policy pays you and members of your household, within the stated limits, for medical expenses, lost wages, and replacement services. These costs are paid no matter who is at fault. This is what is known as “NO FAULT” coverage see below.

Liability covers claims to your policy from another driver. It is also the portion of your policy that covers damages to another’s vehicle, within the stated limits, when an accident is your fault.

Underinsured coverage pays, within stated limits, only for medical claims of those covered by your policy. These benefits are in addition to your PIP benefits and are used when the other driver is held responsible for the accident and does not have enough liability coverage to cover your medical claims.
Uninsured pays for your medical expenses after you have exhausted your PIP benefits and when the other driver is held responsible for the accident but is not covered by insurance.

Collision covers damage to your auto when you are involved in an accident with another vehicle or object.

Comprehensive covers a loss that is NOT the result of a collision. This usually includes fire, theft, falling objects, or an accident involving a deer.

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What about coverage of rental cars?

Minnesota law requires every automobile insurance policy, under the property damage liability portion, to provide a minimum of $35,000 in coverage, without a deductible, for damage to, and loss of use of, a rental car (including pickup trucks and vans under 26,000 pounds). State law further specifies that when a driver rents a vehicle in Minnesota, a separate notice must be attached to the rental contract that informs the driver of this coverage. The notice must also state: “purchase of any collision damage waiver or similar insurance affected in this rental contract is not necessary if your policy was issued in Minnesota.” The same law requires that no collision damage waiver or other insurance affecting the rented vehicle can be sold unless the person renting the vehicle acknowledges in writing that the consumer protection notice has been read and understood.

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What about coverage when you loan your car to a friend?

If any of your friends who are driving your automobile have an automobile insurance policy, their injuries will be covered under their own policy, not yours. If they are not covered under their own policy, and no one in their household is covered under a policy, the basic economic loss benefits will be paid from your policy. Who pays for damage to the car, however, is not quite so simple. Your car will always be covered under your own policy as long as the policy carries comprehensive and collision coverage. Under certain circumstances, however, the policy covering the other vehicle may pay for damage to your car. Check your policy under the definition of “your covered auto.”

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What is No-Fault coverage?

No-Fault coverage is widely misunderstood. Many drivers believe that their insurance company will cover ALL losses in an accident, regardless of who is at fault. But “no-fault” coverage applies ONLY to expenses resulting from injuries sustained in an accident.

Here are some other facts about no-fault: No-fault is a Minnesota law. It was established to help ease the burden of courts and to ensure prompt treatment for accident victims. No-fault IS the Personal Injury Protection (PIP) on your policy, sometimes referred to as Basic Economic Loss Benefits. No-fault covers your medical costs, wage loss, replacement services such as housekeeping, and in the event of death, $2,000 of funeral expenses. No-fault claims are first made on your own PIP. If expenses then prove greater than the PIP limit on your policy, or you attain specified thresholds, you may make a claim against the other driver’s liability coverage if the other driver is found to be liable. Minimum no-fault coverage is $40,000. That amount is available to each person injured in an accident; $20,000 is allowed for medical expenses and $20,000 may be used for non-medical expenses. Coverage beyond these minimum amounts may be purchased. No-fault usually does not apply to accidents when you are riding your motorcycle or snowmobile. You must purchase a separate insurance policy covering these vehicles, and the policies will not include personal injury protection. PIP coverage for snowmobiles or motorcycles can, however, is purchased separately. No-fault claims must be made within six months of the accident. You must include proof of expenses, complete an application for benefits, and submit to a medical examination if requested. Bills should be submitted to the insurance company as they come in.

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What are the minimum coverage requirements in Minnesota?

Minnesota requires all licensed vehicles to have PIP, Liability, Uninsured, and Underinsured coverage in the following amounts:

1. Personal Injury Protection (PIP)-$40,000 per person per accident ($20,000 for hospital/medical expenses and $20,000 for non-medical expenses such as lost wages, replacement services, etc.)
2. Liability-$30,000 for injuries to one person $60,000 for injuries to two or more people $10,000 for physical damage to the other driver’s vehicle or for damage to property
3. Uninsured-$25,000 for injuries to one person $50,000 for injuries to two or more people
4. Underinsured-$25,000 for injuries to one person and $50,000 for injuries to two or more people

 

If you have a loan on your vehicle, the lien holder, as the legal owner of the car, will require you to carry comprehensive and collision coverage. If you do not purchase this coverage, the lien holder may buy it and charge you for the premium. This is termed “forced insurance;” it is extremely expensive, it is legal, and it does not include the required coverage’s listed above.

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What factors affect policy cost?

A number of factors affect the insurance premiums you pay. Different insurance companies may determine rates in different ways, but here are some of the items that affect the cost of the policy.

Added/Optional coverage-In addition to required coverage and optional collision and comprehensive coverage, you may choose additional coverage that will increase the cost of the policy. Full glass replacement, towing, and rental car use when your car is unavailable are examples of optional coverage’s.

Age and gender-Insurance industry statistics show that certain groups of people have different accident rates, based on their age and gender. For example, teenagers and seniors have more accidents. Because they are viewed as an increased risk for the insurance company, they pay more for coverage.

Type of vehicle-Certain vehicles cost more to repair or replace. An insurance company charges more for physical damage coverage on one of these vehicles.

Mileage-The more you drive, the more opportunity for an accident—and the more you pay for coverage.

Driving record-You will be rated according to traffic accidents and tickets you have over a period of years. The more incidents you have, the greater the premium charges. You may also be turned down for coverage if you have too many.

Where you live-If you live in an area with more traffic (a city versus a rural area) industry statistics show that you have a greater chance for an accident and therefore will pay more for coverage.

Deductibles-Some coverage’s in your policy have a deductible, which is the amount you pay first, before your insurance company pays, on a covered loss. The higher the deductible, the lower your premium will be. Insurance companies offer varying deductible amounts.

Discounts-Your premium may be reduced by various discounts offered by some companies in some instances. For example, some companies may offer a discount if you have your homeowner’s insurance with them or if you are a non-smoker. Other discounts are required by law: policyholders age 55 and over who have successfully completed a defensive driving course receive a 10 percent discount; a vehicle equipped with an authorized anti-theft protection device receives a 5 percent deduction on comprehensive coverage.

Surcharges-If you have one or more traffic violations or accidents, your insurance company may attach an additional charge to your policy. Surcharges and how much they will be vary from company to company. The Surcharge Disclosure Sheet, which by law must be given to you at the time you apply for your policy, will have the details.

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Are there ways to reduce the cost of my insurance?

1. Comparison shop.
2. Talk to more than one agent and insurance company.
3. Increase deductibles: the higher the deductible the lower the premium.
4. Ask about discounts. Find out if you are eligible for any of the discount programs offered by the company.

 

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How I shop for insurance?

Decide on the coverage you need and want before you shop
Although you must insure your vehicle to the minimum standards previously described, you do have some options. Before you begin shopping, decide on the policy limits you need for each kind of coverage and the deductibles you can afford. For example, if your deductible is $500 for collision coverage and you have an accident, you must pay the first $500 before your insurance company will pay for the remainder of the loss. You may wish to purchase additional coverage rather than the minimum prescribed. Deciding on the type and amount of additional coverage you want before you talk to an agent or company will allow you to compare “apples to apples.” Discounts can differ from company to company in type and amount. Make your comparison on how these discounts affect the final cost. Using the cost comparison sheet (page 17) will help you comparison shop.

Call several agents
There are two types of agents: those that represent a single company (captive agents) and those that represent a number of companies (independent agents). Each will be able to provide you with a quote for insurance coverage. Make sure you know which company the agent is obtaining the quote from. If you have questions about a company or agent, please call the Department of Commerce Consumer Response Team (CRT) at 651-296-2488 or 800-657-3602.

Ask about surcharges
As noted above, an insurance company may affix a surcharge to your policy if you make a claim or receive a ticket for a traffic violation. Ask about the company’s surcharge policy, under what conditions it is applied, and how the amount is determined. When comparing rates of insurance companies, the seemingly lowest rates may not be, once the surcharge is factored in. Some insurers don’t have surcharge plans; some forgive first accidents, tickets, and similar violations; and most companies will vary in the amount of their surcharge. Every company is required to provide the policyholder with a surcharge disclosure statement, prior to accepting the initial premium payment. Once a policy is in effect, an insurance company cannot change a surcharge plan without first mailing or delivering a copy of the new Surcharge Disclosure Sheet to the insured.

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How do I file and settle an insurance claim?

If you are involved in an accident:

1. Write down the names of any other drivers involved, their insurance companies, policy numbers, and the license plate numbers.
2. Write down the name, address, and phone number of any independent witness to the accident. This is very important.
3. Call your agent or the claims processing number listed in your policy.
4. Call the other driver’s insurance agent or company if you want to file a claim against the other driver’s policy.

 

Obtaining repair estimates
Your insurance company cannot require you to have your vehicle repaired at a specific repair shop. You may choose your own repair shop; however, the insurance company may require you to have one or more estimates, and if your shop is not the low bidder, you may be responsible for paying the difference. If your insurance company requires more than two estimates, it must pay for the additional estimates. The insurance company has a right to inspect your vehicle, although it is not required to do so. The company cannot require an inspection at a claims center solely under its control, but it can require you to drive to one of the company’s “preferred” repair shops so long as it is within a reasonable distance.

The quality of the repair
Your company must restore your vehicle to the condition it was in before it was damaged. Any parts replaced on your damaged vehicle must be original equipment (OEM) parts, unless you agree to “after market parts” (those parts not made by your vehicle’s manufacturer). The OEM parts do not have to be new, however, if your vehicle was not new at the time it was damaged. Two terms used in association with vehicle repair can affect the settlement of your claim: “betterment” and “depreciation.” Betterment means that your vehicle is better than it was before it was damaged; the insurance company can reduce your settlement only if your vehicle’s resale value has increased over what it was before the accident. Generally, the company will deduct the difference between the cost of a used part (appropriate for the age and condition of the vehicle) and the cost of the new part. Betterment is considered only for major parts such as transmissions, engine blocks, etc. Items such as fenders and tires do not generally increase the overall resale value enough to merit a betterment reduction. Depreciation refers to a reduction in your settlement based on the age or use of a part being replaced. Certain parts on your vehicle have a “life expectancy” and an insurance company may take this into consideration. For example, if a tire on your car is expected to last 60,000 miles, and it had 30,000 miles on it at the time of the accident, the insurance company may pay only 50 percent of the cost for a new tire.

Disagreements over claims
The insurance company has two options for meeting its requirement to return your vehicle to its pre-accident condition. The company may assume all costs to repair your vehicle satisfactorily, or it may offer cash settlement to pay for satisfactory repair. In both cases, satisfactory repair includes repair of all obvious and hidden damage caused by the incident. If you disagree with the insurance company about whether it has met its requirements under the law, you should first speak with the adjuster assigned to your claim or his or her supervisor. If you are unable to resolve the issue, you may contact the Department of Commerce Consumer Response Team at 651-296-2488 or toll free 800-657-3602. The CRT will attempt to resolve the matter informally. If it cannot be resolved in this way, you may be asked to send a letter to the Department to begin a formal investigation, or the CRT may inform you of your right to pursue action in small claims court or arbitration as outlined in your policy.

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Can the insurance company cancel or non-renew my policy?

Within first 59 days-Minnesota law prohibits any person being denied an insurance policy on the basis of employment status, status as a tenant, or for not previously having an auto insurance policy (unless the person was legally required to have one). Except for these reasons, an insurance company can cancel an insurance policy for any reason within 59 days of issuing it.

Cancellation or reduction of coverage during the term of the policy-After the first 59 days, an insurance company cannot cancel a policy during the policy period except for the reasons summarized below; complete itemizations of causes for cancellation are contained in Minnesota Statutes Chapter 65B.15. Minnesota law also requires that the policyholder be notified of the cancellation and reasons for it.

1. Nonpayment of premium.
2. The policy was obtained through a misrepresentation.
3. If the insured knowingly made a false or fraudulent claim and aided another in presenting a false claim.
4. Failure by the insured to disclose any accidents or traffic violations within the preceding 36 months or to disclose any requested information on the written application that would affect acceptance or the risk rating.
5. Failure to disclose that the insured is the subject of a lawsuit or refused to cooperate in a claim investigation.
6. Failure to identify another person in the household who would be insured under the same policy.
7. Has health problems such as epilepsy or heart attacks and does not provide a physician’s written statement that despite these problems the insured can safely operate an automobile.
8. The insured automobile is so defective that its operation might endanger public safety or it is used for particular purposes that increase risk.

 

Nonrenewal of a policy-At the end of the policy period, the insurance company might choose not to renew the policy for any of the reasons listed above. In addition, there are other reasons a company may choose not to renew. These include failure of the insured to provide necessary underwriting information requested by the insurance company. The request must be in writing, be sent twice, and state why the information is needed; the second request must inform the policyholder that the policy will not be renewed unless the information is provided. Another reason for nonrenewal is the termination of an insurance company’s contract with an agent. The company can drop the policies carried by that agent, except in the case of drivers 65 or older. These drivers must be informed that they have the right to continue their policy. The collection by the insured of a certain number of points is another reason for nonrenewal. Points are assigned based on auto violations or accidents, and a total of two points acquired by one insured on a single vehicle is sufficient to warrant nonrenewal. See Appendix I on page 14 for a complete description of the point system as prescribed by Minnesota Rules.

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What is the "points" system in Minnesota?

Minnesota Rules, Chapter 2770, prescribes the following point system:

Four points are assigned for each of the following:

1. Leaving the scene of an accident without stopping to report.
2. A felony involving the use of a motor vehicle, including manslaughter, criminal negligence, or assault originating out of the use of a motor vehicle.
3. Theft of a motor vehicle.
4. Any violation that results in the suspension or revocation of a driver’s license, such as DWI, and driving after being suspended or revoked.

 

Two and one-half points are assigned for:

1. Reckless driving.

 

One and one-half point is assigned for:

1. Careless driving.

 

One point is assigned for:

1. A “chargeable” accident in which the insurer pays more than $500, not including payment made under uninsured or underinsured coverage. A chargeable accident is defined as an accident in which the insurer makes payment under bodily injury, property damage, or collision coverage, but there are several exceptions. See Minnesota Rules 2770.7700 for a complete definition.
2. An open bottle violation.

 

Three-fourths point is assigned for:

1. The second and each subsequent speeding violation during the three years preceding the renewal date.

 

One-half point is assigned for:

1. The first speeding violation during the three years preceding the renewal date.
2. A chargeable accident in which total payment by insurer is $500 or less.
3. Allowing someone in your car to have an open bottle.
4. All other violations.

 

Points for nonrenewal
Following is the schedule for the number of points that must be accumulated before a policy will not be renewed:

Number of household vehicles Insured by the same insurer	Number of points required for nonrenewal
1	2
2	3
3	3 1/2
4 or more	4

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What types of homeowners (HO) policies are there?

 

Three types of HO policies are commonly offered. The first two, usually termed HO-1 and HO-2, insure the dwelling, other structures, and personal property against a list of named “perils,” or causes of loss, such as fire, lightning, etc. HO-1, a basic policy, commonly covers some 11 perils. HO-2 is broader, covering some five or six additional perils. A third policy, usually termed HO-3, includes an “all risk” clause that covers nearly all perils or causes of loss, with specified exceptions. The exceptions almost always include flood, earthquake, war, and nuclear hazard. (See Appendix 1 Below)

 

HO-3 is probably the most widely sold homeowner policy. Although the all-risk clause adds to the cost of the premium, without the clause, coverage is limited to damage caused by one of the named perils.

 

Liability. The liability portion of the homeowner policy protects against a claim or lawsuit brought by someone who is injured on your property or by something you do. The claim can also be for damage to that person’s property, if it is caused by something you do or for which you are responsible. The liability portion of your homeowner’s policy pays for damages when you are liable for an injury, medical expenses if the person is injured, and provides legal expenses to defend you even in cases where the suit is not thought to be justified.

 

Other Types of HO Policies
Variations of these common homeowner policies are available for other types of dwellings. They include:

 

Renter’s or tenant’s policy. The standard renter’s policy insures your personal property against the expanded list of perils named in the HO-2 policy, and also includes liability coverage; it does not, of course, cover the actual building or other structures, which are the responsibility of the owner.

 

Mobile home policy provides basically the same type of coverage as the common HO policies described above. Premiums are usually higher because of the greater susceptibility of mobile homes to wind damage.

 

Condominium owner’s policy. The condominium association buys insurance covering the building and other structures. The owner of the condominium unit, therefore, usually buys a policy similar to the renter’s policy in that it principally provides personal property and liability coverage. You should check with the condominium association, however, to determine the extent of its coverage. Typically, the association’s insurance covers only the exterior walls, and damage to such items as bathroom fixtures, kitchen cabinets, and carpet would need to be covered by your policy.

 

Actual Cash Value coverage (often termed HO-8) is similar to HO-1 in providing both property and liability coverage for some 11 named perils, but it differs from most HO policies sold today in that it covers repairs or reimburses based on Actual Cash Value—not replacement or rebuilding costs. This type of coverage is often sold to cover older homes that have some architectural or other features that make their replacement cost significantly higher than their market value. It also is commonly sold to those who cannot afford or qualify for the more comprehensive HO policies described above.

 

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How much coverage do I need?

 

Coverage for the property portion of the homeowners’ policy includes three parts that are often distinguished by the letters A, B, and C: Coverage A for the dwelling, Coverage B for the other structures, and Coverage C for personal property. A fourth type of coverage—sometimes termed Coverage D—compensates you in case you are forced to live elsewhere while your home is being repaired or rebuilt. All property coverage includes deductibles— the amount that you must pay before the insurance company pays the balance. A common deductible is $250.

 

Coverage A, the dwelling, is usually based on the cost of replacing the house, subject to a maximum dollar amount. Minnesota law prohibits an insurance company from knowingly insuring a home for more than its replacement value. Typically, the minimum coverage is 80 percent of the replacement value of the house. A home with a replacement value of $120,000, for example, would typically be insured for $96,000. Because of inflation, increases in construction costs, and other changes that cause the value of your property to go up, you may consider including an inflation guard clause in your policy. This automatically adjusts the amount of your coverage to reflect an increase in value. Not all companies offer this option.

 

Coverage B, other structures on the property, is determined by the amount of Coverage A. The standard coverage limit is 10 percent of Coverage A, although this can be increased at your request. In the case of the example used above, the standard coverage would be limited to $9,600.

 

Coverage C, personal property, compensates you for damage to or loss of your personal property, and is usually subject to a limit of 50 percent of Coverage A. In the example used, this limit would be $48,000. Many homeowners increase this coverage limit to 70 or 75 percent, but most policies set individual limits on certain types of property such as money, securities, jewelry, and watercraft.

Check these limits; if you have some highly valuable possessions that would not be adequately covered under these limits, you might want to consider buying a special personal property endorsement or “floater” that would insure these items separately. As noted in the opening paragraph of this guide, providing replacement cost coverage for personal property is an important feature, since policies that compensate based on Actual Cash Value are likely to prove inadequate. If the company’s policy does not provide for replacement cost of personal property, Minnesota law requires the company to state this on the policy declarations page. Minnesota law stipulates that if an insurance company limits Coverage B and C to a percentage of the dwelling (Coverage A) limit, it must also offer an option allowing policyholders to purchase lower or higher percentage limits; the company must also provide a rate credit for lower-than-standard limits.

 

Coverage D, loss of dwelling use, pays additional living expenses if you are forced to live elsewhere while your home is being repaired or until you can move into a new dwelling. The amount of coverage is based on actual living expenses required to maintain your normal standard of living, or on the fair rental value of your dwelling, less any expenses that do not continue while the home is repaired. Payment is for the time it takes for the home to be repaired or for you to relocate.

 

Liability Coverage
Liability coverage is the second major part of your home insurance policy. The standard amount of liability coverage is $100,000, but this periodically increases. If you have a lot of assets to protect, you may want to buy a personal liability umbrella policy.

 

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What is an Umbrella policy?


This type of policy provides additional liability coverage and is applied after the liability coverage in your homeowner policy runs out. Besides providing additional monetary coverage, it also expands coverage to include personal injury. The standard homeowner policy covers bodily injury and property damage, with personal injury offered as an option. (Personal injury includes such actions as false arrest, defamation, and invasion of privacy.)

 

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What affects premium rates?

 

Homeowner policy rates depend first of all, of course, on the extent and dollar amount of coverage: a policy with an “all risk” clause will cost more than a policy that covers damage resulting from a limited number of named perils; a policy that provides replacement cost coverage for a $300,000 home will cost more than for a $100,000 home; liability coverage of $300,000 will cost more than coverage of $100,000.

 

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How can I reduce my premiums?

 

Lower Coverage B and C. In Minnesota, homeowners may reduce their rates by reducing the dollar limits of coverage for structures other than the dwelling (Coverage B) and for personal property (Coverage C). State law requires insurance companies to offer lower than standard limits for these types of property and to reduce the premium accordingly. If you choose to have lower limits, take care that you are not running the risk of being underinsured. Many people underestimate the replacement value of their personal property.

 

Higher deductibles. You can also lower the premium by raising your deductible—the amount of money you pay before your insurance company starts to pay for a loss. Doubling your deductible from the standard $250 can often reduce your rates about 12 percent; increasing the deductible to $2,500 can often save about 30 percent.

 

Safety and security systems. Some companies offer discounts for sprinkler systems, fire and burglar alarms, and similar systems. In the case of mobile homes, tie-downs or ground anchors, which reduce the risk of wind-caused damage, can lower rates.

 

Discounts and group rates are sometimes available to seniors, or members of a professional or business organization. Some companies also offer a discount if you have another policy with them—such as auto insurance—or if you have stayed with the same company for several years. If a company offers these packaged discounts to homeowners, it must also offer them to individuals having a renter’s or a condominium owner’s policy with the company.

 

Renovations. If a company offers a lower rate for a new home, it most also offer a rate reduction for renovated homes. As an example, a company may give credit for one or more of the following: renovated electrical, heating or cooling, and plumbing systems, as well as roof or other part of the structure.

 

Don’t Smoke. Non smokers receive reduced rates from some companies, since smoking accounts for a large number of residential fires each year.

 

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What cannot affect rates?

 

Minnesota law prohibits insurance companies from adjusting rates based solely on —

 

1. The geographic location of a town in which the home is located.
2. The age of the home construction (unless identical credit is also offered for one or more renovated systems as noted above).
3. Different zip code areas in the same town.
4. The fact that the homeowner may have previously been denied coverage for the property unless it was for reasons stated in Minnesota statutes 65A.01.
5. The fact that the property has previously been insured under the Minnesota FAIR Plan.

 

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Can I be denied coverage? 

 

Just as an insurance company cannot offer different rates based on any of the reasons cited above, neither can it refuse to offer or renew a policy for these reasons. In the case of the age of the house, a company can refuse to insure a property constructed before a certain date, but only if the electrical or other specified systems have not been renovated since that date. In other words, the age of the system or systems determine whether a company can refuse to insure a dwelling. The property must also meet reasonable underwriting standards; these include consideration of the property’s proximity to an extraordinary hazard; access to fire protection; physical condition, including state of the heating and wiring; present use, such as vacancy or overcrowding; and other characteristics such as storage of rubbish or flammable materials that increase risk.

 

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Can my policy be canceled?

 

Once a policy has been in effect for at least 60 days, or has been renewed, it can be cancelled (that is, terminated during the period in which the policy is in effect) only for the following reasons:

 

1. Nonpayment of the premium.
2. A false statement or misrepresentation by the insured in applying for the policy or in presenting a claim.
3. An increase in risk from what was originally accepted for coverage; the increase can be due to something the insured does or omitted to reveal in the application.
4. If a physical change occurs that increases risk to the property after the policy is in effect, and the change has not been corrected within a reasonable time.
5. Nonpayment of dues to an organization in which membership is required for the particular insurance policy.

 

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Can my policy be non-renewed?

 

No insurance company can refuse to renew a policy at the end of its period except for the reasons for cancellation, cited above, and for the following reasons:

 

1. Using the property for an illegal activity.
2. Cancellation by the insurance company of its contract with an agent, unless the company assigns another agent to the policy. (The company must also transfer the policy to another agent if the insured requests it in writing before the nonrenewal date; see notification required, below.)
3. Violation of laws that increase the possibility of loss.
4. Refusal of the insured to eliminate conditions which increase risk after being notified by the insurance company that the conditions must be removed.
5. A change in the quality or availability of fire protection services.
6. Two or more losses by the insured within the past three years, unless the losses were caused by lightening or other storm-related phenomenon, or they did not result in any payment by the insurance company, or 80 percent of the costs were recovered through another party.
7. The company stops writing homeowners’ insurance in Minnesota.
8. The insured homeowner fails to provide information relating to the insurability of the property when requested by the company.
9. Failure to pay property taxes on the insured property for two or more years.
10. The homeowner no longer owns that particular property or no longer lives there.

 

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How do I file a homeowners insurance claim?

 

When a loss occurs, the homeowner should notify the insurance company or agent immediately, and within 60 days give a written notice that states the amount of the loss. The company can require the insured to fill out a proof of loss form.

 

Denial of claim. A company can refuse to pay for a loss if it finds that the insured has misrepresented the facts regarding the loss or has not been forthright about risks to the property. Nor is the company required to pay a fire or lightning claim if the property has been vacant or unoccupied beyond a period of 60 consecutive days.

 

If the terms of the policy are for payment of loss based on replacement cost, the company will reimburse this amount, subject to the limits of the policy. Payment is done in one of two ways: you can replace or repair the insured property immediately, submit a receipt, and be reimbursed for that amount. Or you can initially collect the Actual Cash Value of the loss from the company; later, when you submit a receipt, the company will pay you for the difference between the payment and the replacement or repair cost. Usually, you must submit the receipt for replacement or repair within 180 days of receiving the initial payment.
In the case where the insured and the company do not agree on the amount of loss, Minnesota statute provides for resolving the dispute through an appraisal process.

 

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What losses are commonly covered?

 

The 11 named causes of loss or perils commonly covered by the most basic homeowner policy (HO-1) are:

 

1. Fire or lightening
2. Windstorm or hail
3. Explosion
4. Riot or civil commotion
5. Aircraft
6. Vehicles
7. Smoke
8. Vandalism or malicious mischief
9. Theft
10. Falling objects
11. Weight of ice, snow, or sleet

 

Additional named perils covered by the next level of homeowner policy (HO-2):

 

1. Breakage of glass that is part of the building (both replacement of the glass and repair of any damage to the building caused by the broken glass).
2. Accidental discharge or overflow of water or steam from plumbing, heating or cooling system, automatic fire protective sprinkler system, or household appliance.
3. Sudden and accidental tearing apart, cracking, burning, or bulging of any of the above.
4. Freezing of any of the above.
5. Sudden and accidental damage from an electrical surge.
6. Volcanic eruption other than that caused by an earthquake.

 

Extended coverage (HO-3) includes all perils stated above plus any other peril except for those specifically excluded. These exclusions commonly include flood, earthquake, war, and nuclear hazard. In Minnesota, state law also requires some coverage for costs incurred as a result of the application of a building ordnance or law.

 

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What is not covered?

 

House inundated by flood waters? Your homeowner’s insurance policy will not pay for the damage. Floods—along with earthquakes, wars, and nuclear hazards—are among the perils not covered by homeowners’ policies. Flood insurance is available to most Minnesotans, however, through the National Flood Insurance Program. About 90 percent of Minnesota residents live in areas participating in this program.

 

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