New Bill Would Explore Solutions to Minnesota’s Growing Property Insurance Crisis

New Bills Would Explore Solutions to Minnesota’s Growing Property Insurance Crisis

There’s a multi-sector insurance crisis in Minnesota—and a new bipartisan bill, SF 2205, introduced this week in the state legislature aims to identify solutions to Minnesota’s growing property insurance crisis to better support the millions of Minnesotans that rely on it. 

“On top of the housing shortage driving up Minnesotans’ mortgages, the spiraling cost of insurance has become an alarming burden on property owners of all kinds. As the uncertainties of climate change hit the insurance market, Minnesotans need policies they can rely on when disaster strikes. We cannot allow the dream of homeownership to fall even further out of reach; the Legislature needs to take action. This task force on homeowners and commercial property insurance would help identify the forces behind the rise in property insurance costs and provide vital insight to lawmakers as we create a solution.”
Senator Lindsey Port (55, DFL), Chair of the Senate Housing and Homelessness Prevention Committee and the chief author of SF 2205

This week the Minneapolis Federal Reserve released a report, finding that multi-family housing providers have seen massive increases in their insurance costs, including an average 45% increase in premiums and a 700% increase in deductibles over the past three years alone. These troubling trends are also being felt among homeowners and small business owners in Minnesota

“As a statewide consortium of nonprofit affordable housing developers and economic development organizations, our members are on the frontlines of this crisis. Last year, our affordable housing members began sounding the alarm about the devastating impact insurance costs are having on their operations budgets and the people they serve. We knew we had to take action to preserve these essential properties —and the homes of thousands of Minnesotans.” 
Elena Gaarder, CEO, Minnesota Consortium of Community Developers

Mary Novak, Executive Director of Riverton Community Housing, which is home to approximately 1300 students and community members in Minneapolis, said they continuously struggle to secure insurance for their properties. “We have submitted as many as 50 applications, to just get one quote with a high premium and deductible,” she said. “This has resulted in unsustainable premium growth. For example, in the last 4 years we have seen premiums grow 60% when we used to see single digit year over year increases.”

"Habitat for Humanity homeowners and homebuyers across the state are reporting that rising insurance premiums are causing concerns about the long-term affordability of their homes or pricing first-time homebuyers out of their monthly budgets. It is deeply concerning that rising rates and higher deductibles are having such an impact on hard-working Minnesotans, potentially making it even harder for them to realize and maintain the dream of homeownership.”
Cristen Incitti, CEO of Habitat Minnesota

For years, MCCD has worked at the Minnesota state legislature to grow and strengthen communities across Minnesota through investments in affordable housing, homeownership and small business development. This session, in conversations with lawmakers and key stakeholders, there was clear consensus: Unstable insurance rates are a growing concern, but no one has answers. 

“We know this is a multi-sector, bi-partisan issue that requires careful study and collaboration. That’s why we’ve been working for months to propose a bill creating a homeowners and commercial property insurance task force that can identify solutions and serve as a catalyst for administrative and legislative changes in future legislative sessions.”
Kari Johnson, MCCD’s Director of State Policy and Field Building

Outlined in SF 2205 and HF 2228, the task force would convene shortly after the conclusion of the 2025 legislative session and include members from the legislature, the department of commerce, insurance industry experts and community development organizations representing affordable multifamily housing, affordable homeownership and small business economic development. Key focus areas for the task force would include costs drivers, a review of liability laws, data collection and the potential for a state supported reinsurance or insurance fund. 

"We’ve been hearing from homeowners and housing providers across the state who have struggled with property insurance issues. This bill takes an important first step towards addressing unstable insurance rates that we’ve been hearing about for years. Our bill creates a task force that gets all parties to the table so they can create recommendations for the industry to consider. This is a unique problem that requires a bipartisan solution, and I’m happy to be part of this effort."
Senator Karin Housley, (33-R)