Homeowners Insurance in North Dakota

North Dakota leads the production of many agricultural products. It has mountain regions, lots of farmland, and badlands and borders Canada to the north. The state is at the top of the midwestern region, which means it is prone to tornadoes, earthquakes, flooding, extreme winter storms and freezing, and wildfires. All of which are very dangerous for people and damaging to property. Since 1953, North Dakota has seen 58 federally declared disasters, and the rate of disasters per 1 million people is a whopping 73.52.

Along with natural disasters causing damage, North Dakota residents also file claims for water damage due to freezing and burst pipes, fallen tree damage, liability incidents, theft, and vandalism.

None of the U.S. states require that homeowners buy insurance to protect their investments. If you buy a piece of property by borrowing money, your lender will require you to purchase home insurance and keep it active for the life of the loan.

As of September 2024, the national average for homeowners insurance is $2,728 a year, or $227 a month. North Dakota residents pay an average of $2,941 annually, just slightly more than the national average.

All over the country, homeowners insurance providers decide where to set up shop. Not all carriers operate in all states. Depending on the potential perils, these providers decide where to sell insurance and what types of coverage to offer. The available types of insurance in North Dakota include:

You may also want to consider flood insurance or an umbrella policy too.

FEMA (Federal Emergency Management Agency) manages the National Flood Insurance Program (NFIP) through a network of 50 providers across the U.S.

Since most homeowners insurance does not cover floods, this supplemental coverage can repair damage and replace items after a flood. Depending on the options you choose, it can cover the building and/or your personal belongings. This program is available to homeowners, renters, and businesses. Learn more about the program on FEMA's website.

Global warming is a problem for us all, but it is hitting the home insurance market the hardest. Climate change and frequent weather disasters are the number one drivers for rate increases in the U.S. Over the past five years, rates have increased an average of 34% across the board, but in some turbulent areas, they have increased as much as 60%. In North Dakota, home insurance rates have risen by 16.6%, which is surprisingly far less than the average.

Unfortunately, North Dakota is subject to many different types of disasters, like tornadoes, earthquakes, flooding, extreme winter storms, and wildfires. These are damaging and costly events. One fire claim can cost insurers an average of $77,340. Water and freezing damage cost an average of $11,650, and wind and hail cost an average of $11,695. From 2015 to 2019, North Dakota insurance providers lost $99,088,200. From 1980 to 2024, the state had 24 billion-dollar disasters. In 2023, North Dakota had only five tornadoes, but in 2022, it had 111 wildfires destroying 1,509 acres of land.

As rates ramp up throughout the United States, homeowners wonder how to cut costs. The key is understanding what things affect prices so you can make changes to reduce your overhead. In North Dakota, the factors that impact home insurance rates are:

Some ways to save on your homeowners insurance in North Dakota include:

• Shop Around: Shop around for the best insurance provider for you. Get multiple quotes and compare.
• Don't File Small Claims: Avoid filing small claims and wait to use your insurance until you need it.
• Raise Your Deductible: Raise your deductible as high as possible to get lower rates.
• Make Your House Stronger: Reinforce your roof, siding, and windows to get better rates from your provider.
• Bundle Policies: Bundle multiple policies together to get better rates.
• Ask for Discounts: Ask your insurance agent for any available discounts.
• Avoid Risks: Avoid adding any new risks to your property to keep your rates manageable.
• Improve Security: Install a high-end security system to monitor for any perils, theft, or vandalism, and your rates will improve.

Home insurance protects your home against various covered perils. After a qualifying event, the insurance company will pay to repair or replace your home, restoring it to its previous condition. Most policies include dwelling coverage, other structures coverage, liability and medical payments protection, personal property coverage, and ALE. Some covered perils include fire, smoke, lightning, snow/ice damage, freezing, burst pipes, fallen trees, windstorms, and hail.

You can easily acquire a policy by choosing a provider and then contacting them online through their website or calling. Many of them have online calculators and online applications to help you decide how much coverage you need. You could also find a local agent to help you. They can offer better in-person service and help you determine what is best for your situation.

The most common discounts offered by reputable home insurance firms include:

• Early Quote Discount: Get a quote well before you need it and earn yourself a discount.
• Claims-Free Discount: Go claims-free for as long as possible and earn a discount from your provider.
• Non-smoker Discount: Non-smokers earn an automatic discount for being less risk of a fire.
• Green Discount: Installing green appliances and other household systems can lower your rates.
• Safety Discounts: Install fire safety items or a security system, and your carrier may offer you a discount.
• Multi-policy Discounts: Bundle multiple policies with the same insurer and get better rates.
• Employee Discounts: Government employees and particular professionals like firefighters and teachers earn discounts on home insurance.
• Military Discounts: Insurance providers give members of the military a discount on home insurance.
• Restoration Discounts: When you restore an older home bringing it up to code and making it safer, you get a discount.
• Autopay or Paperless Discount: Sign up for autopay or paperless statements, and your insurance company should give you a discount.
• Retiree Discount: Senior citizens often get a discount on their insurance when they reach a certain age.
• Smart Home Discount: Smart home devices can help detect problems and avoid disasters and claims. Your insurer will give you a discount for installing them.
• Loyalty Discount: You will receive a discount if you have been loyal to the same company for many years.

Common Rates Offer by Homeowners Insurance Firms

New homes cost far less to insure, sometimes as much as 40% less. Homes that are five years old or less cost roughly 26% less to insure. The age of the house matters a lot. New homes in North Dakota cost an average of $2,513/year to insure. However, your actual rate will depend on your customer profile and other factors.

Top 10 Home Insurance Firms in North Dakota and Average New Home Savings

Home renovations can turn a drab, tiny space into a marvel overnight but can also drastically impact your home insurance rates. Some upgrades to your home make it safer and lower your risk and insurance rates. Other updates may increase your risk and the value of your home, and your rates will go up. Some have no effect at all.

Home Renovations that Increase Rates

Some home renovations that increase your rates include:

• Adding a Home Office: Working from home can improve your work-life balance, but adding a home office will also increase your homeowners insurance. Some items like office equipment may need their own policy.
• Solar Panels: Solar panels can help you save big on electricity, but they will increase your home insurance rates because they are costly to replace.
• Luxury Upgrades: If you replace your appliances, fixtures, and countertops with luxury materials, your insurance rates will increase. High-end upgrades cost more to replace.

Home Renovations that Decrease Rates

Some home renovations that decrease your rates include:

• Install a Sump Pump: Installing a sump pump can remove any excess water in your basement and prevent a flood, water damage, and costly claims. Your insurer will decrease your rates if you have one.
• Home Security System: Installing a home security system that keeps your home safer and prevents claims will earn you a discount from your insurance provider.
• Foundation Repairs: Repairing your foundation to prevent disasters is a win-win for you and your insurance carrier. They may lower your rates because of it.

Generally, replacing your roof is a good thing. If you replace it with high-end materials like metal, your insurance rates may go up, but the safety features may cancel them out; it depends on your insurer.

Regular updates to your home are not covered by homeowners insurance. Your insurance only pays to repair or rebuild your home after a disaster, not maintenance or elective renovations. However, those things are covered if someone steals from you or gets hurt during renovations. Other things not covered are animal damage, pest infestations, and rodents.

Always speak to your insurance agent before making any major renovations. They will help you understand the impact on your rates and coverage. Your agent may want to inspect the work once it is done to re-evaluate your coverage limits and make adjustments.

People who choose to rent (apartments, condos, houses) rather than buy also need homeowners insurance. However, renters insurance does not include any dwelling coverage. The property owner will cover the structure according to their own policy. Renters insurance's primary purpose is to protect your personal property. It pays to replace your items if they are stolen or destroyed in a covered peril. Most policies also include liability, medical payments, and loss of use coverage. Some covered perils include smoke, fire, theft, vandalism, water damage, hail, and windstorms.

Things that will be replaced with renters insurance:

Renters insurance is priced according to three main principles:

Most Americans pay between $15 and $20 for renters insurance. North Dakota renters pay an average of $10/month or $119 a year, which is slightly cheaper than the national average.

Condo insurance is homeowners insurance designed specifically for condo owners. It is slightly different than homeowners. Typically, condo associations have their own "master policy", which covers the dwelling coverage. After a disaster, that master policy will pay to replace each building and restore it back to its original condition (when it was first built). Depending on when it was built, that could leave things very outdated. Most condo owners have long since upgraded their kitchens, baths, flooring, appliances, and light fixtures. That is where condo or HO-6 insurance comes in. It pays to restore the interior of the condo back to its most recent condition. Condo insurance policies also include liability, personal property, medical payments, loss of use, and loss assessment coverage.

Unlike renters insurance, which has no dwelling coverage, condo insurance does, but it only covers the interior. Plus, the liability portion only works if the person is hurt inside the condo, not outside or on common grounds.

Some things that condo insurance will replace include:

• Appliances
• Interior Walls
• Flooring
• Wiring
• Plumbing
• Cabinets
• Countertops
• Furniture
• Light Fixtures
• All Personal Belongings

The average amount for condo insurance in North Dakota is $373/year or $31/month for $60,000 in personal property coverage, $300,000 of liability with a $1,000 deductible.

• Increase Your Deductible
• Skip Small Claims
• Bundle Multiple Policies
• Make Your Home Safer
• Ask for Discounts
• Improve Your Credit Score
• Eliminate Risks
• Shop Around for Rates
• Review Your Policy Annually

Unprecedented losses and climate change are wreaking havoc on the home insurance market across the U.S. More frequent disasters are costing insurers billions. Insurance providers have been lucky and mostly profitable in North Dakota over the past ten years. However, those profits have declined significantly. In 2023, North Dakota experienced two separate billion-dollar disasters, while neighboring states saw considerably more.

Although North Dakota has the potential for tornadoes, earthquakes, flooding, extreme winter storms, and wildfires, which cause damage and claims, the state has been fortunate. However, as these events become more frequent, the tides may turn in North Dakota, and insurance providers may start to accumulate big losses instead of profits. When this occurs, they will be forced to limit coverage and even cancel some customers, making it difficult for homeowners to find insurance.

Home insurance regulation is left up to each state to handle. They appoint an agency to field customer complaints, perform investigations, monitor providers and rates, and sanction guilty firms. In North Dakota, this agency is the North Dakota Insurance Department, located at 600 East Blvd. Avenue, 5th Floor, Bismarck, ND 58505.