We have heard the news – insurance is not getting any cheaper. This year, Minnesota homeowners may have insurance premiums increase by 15%.[1] That increase dramatically exceeds inflation.[2] Those on a fixed income may have difficulty keeping pace with rising insurance costs. It is only a matter of time before Minnesotans will feel the impact of these rising property insurance costs.[3] We unfortunately do not see these increases slowing down anytime soon. This then calls into question what are Associations doing to manage these rising insurance costs.
The first thing to know is that Associations do not control the insurance market or how expensive insurance is. Insurance carriers have to look at the current market and whether their current offerings are sustainable in the marketplace. Insurance companies state that “they have been losing money in Minnesota the last few years because of an increase in hail storms,” and insurance companies are not in business to lose money. If the situation does not change in the foreseeable future, premiums are going to increase and there will be less options available to reduce annual premiums to the rates we typically see.[4]
Associations, through their Board of Directors, may be able to compare premiums from different carriers. However, this is not an actual negotiation. It is rather an evaluation of how to adjust coverage to make the premium more affordable. For example, having a 10% wind/hail deductible may result in a lower annual insurance premium cost than a 5% deductible. Some Associations have had success at shopping around and looking into carrier-specific discounts. Although overall it has been said that trying to reduce insurance costs is comparable to trying to negotiate your taxes – you just cannot do it.[5]
Depending on the type of community the Association governs, the Association may have a legal obligation to provide insurance,[6] even when insurance has a drastic 100% increase. If the insurance is not attainable to the community, then there may be creative, legally compliant avenues to work through these obligations without violating state law. Associations may be able to obtain an exception under state law, levy a special assessment, or evaluate an amendment to their governing documents. Each situation is unique, and Associations must closely evaluate their statutory and fiduciary obligations to make a decision that meets their specific needs. The attorneys at Hellmuth & Johnson have decades of experience working with Associations. Please reach out to Hellmuth & Johnson’s Associations team if you have any questions about Associations.
[1]KSTP.com “Minnesota homeowners insurance premiums projected to rise 15% in 2025.” (July 10, 2025). https://kstp.com/kstp-news/top-news/minnesota-homeowners-insurance-premiums-projected-to-rise-15-in-2025/
[2] U.S. Bureau of Labor Statistics “Consumer Price Index, Minneapolis-St. Paul-Bloomington area – July 2025” https://www.bls.gov/regions/midwest/news-release/consumerpriceindex_minneapolis.htm
[3] See MinnPost. “Tips for homeowners on navigating rising insurance rates.” (August 6, 2025) https://www.minnpost.com/community-voices/2025/08/tips-for-homeowners-on-navigating-rising-insurance-rates/
[4]Kare 11 “Hail storms in Minnesota lead to huge insurance price increases.” (July 31, 2024) https://www.kare11.com/article/news/local/hail-storms-in-minnesota-lead-to-huge-insurance-price-increases/89-fc714fa1-56dc-42b9-aad8-472ec2ff84a3
[5] CNET. “Here’s Why You Can’t Actually Negotiate Your Insurance Rates.” (July 2, 2002) https://www.cnet.com/personal-finance/insurance/insurance-myth-debunked-why-you-cant-negotiate-your-insurance-rates/
[6] See Minn. Stat. § 515B.3-107; Minn. Stat. § 515B.3-113.
