Harvey won't boost your homeowners insurance rates. MN storms already are

Harvey, the hurricane turned tropical storm, likely won't increase homeowners insurance rates in Minnesota.

Recent severe storms here already doing that — Minnesota's insurance industry says it has had plenty of its own costly storms in the past two decades.

"We've just seen a very large increase in the severity of the storms, the size of the storms, the damage that they're causing," said Mark Kulda, spokesman for the Insurance Federation of Minnesota. "That has had an absolute, definite impact on homeowners' insurance premiums."

For example, an early June storm that hit northern Twin Cities suburbs caused about $1 billion in damages, Kulda said. The average annual homeowner insurance premium in the state increased almost fourfold from 1997 to 2013 when it reached $1,219, he said.

Only about 9,500 Minnesota homeowners buy flood insurance, Kulda said. That's surprisingly low, he said, given the risk of flooding throughout the state and that it's a bargain, courtesy of the U.S. taxpayer.

In Texas, hundreds of thousands of homeowners are expected to file claims under the federal flood insurance program. Premium revenue for that coverage has not come close to matching flooding risks and losses.

As of March 2016, the program owed the U.S. Treasury $23 billion.

"They've deliberately under-charged for premiums," Kulda said. "I think someday there will be a righting of the ship there and when it does happen then everybody would have to pay more premium for flood insurance."

Why won't premiums likely rise in Minnesota? They're set locally.

"It's like the old real estate mantra, 'Location location location,'" said Minnesota Commerce Department spokesman Ross Corson. "The key factor in homeowner's insurance premiums really comes down to the risks and claims experience of homes and property in a specific geographic area."