Consumers feeling the pinch of rising insurance costs
Consumers have seen insurance rates climb over the past few years, and those increases are expected to continue in part due to President Trump's tariffs.
In 2024, the average homeowner's insurance bill increased 15%, adding an average of $500 per year to people's bills. Car insurance costs have risen 55%, adding an average of another $500 per year.
It comes as Minnesota is experiencing more powerful and frequent hailstorms. In 2024, the state experienced 190 hailstorms — three times more than the national average. An August 2023 hailstorm in Minnesota caused $1 billion in damages.
A new factors driving up insurance rates are Mr. Trump's tariffs, with replacement parts for a damaged older home or car are significantly more expensive.
"So whether that is a repair or, you know, part of your house that needs to come in from elsewhere, it's all going to get impacted by the tariffs," said Minnesota Department of Commerce Commissioner Grace Arnold.
As a result, consumers are choosing cheaper policies that can cost them in the long run. Check your deductible: many have been changed from flat rates to percentages of the value of a home or car.
Another costly surprise for consumers is realizing, after the damages, they have an actual value policy instead of a replacement value policy.
"I will give the example of my husband. He got rear-ended. He had a bike rack on the back. When he parked the bike rack, it was like $1000," said Arnold. "The insurance company paid $250 because it was five or six years old. The most valuable part of that bike rack had depreciated over time."
