Homeowners Insurance in North Dakota
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UPDATED: Mar 13, 2020
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Did you know that National New Homeowners Day is celebrated every year on May 1st? If you're sick of being beholden to monthly rent payments and daring enough to take the plunge into private home ownership, then you're on the right site. Our handy guide can help you navigate the tumultuous waters of insurance shopping and help you find the very best deal.
In most states, North Dakota included, the most popular type of policy is referred to as an HO-3 special form policy. It helps cover all your property - including your dwelling, external structures, personal property, and more - and protects against a great many perils. Below is an example of what type of coverage you'll end up purchasing for a $200,000 home:
|Types of Coverage||Coverage Amount|
|Replacement Cost (Dwelling)||$200,000|
|Replacement Cost (Contents)||$100,000|
In addition to your regular deductible, insurance companies have started instituting wind/hail deductibles in recent years. These deductibles are usually higher than your normal deductible, and can sometimes be as high as 1-2% of your home's total value.
It might seem strange that average insurance premiums in North Dakota are so high. But if you think about it, and about how insurance typically works, it's not so much of a mystery. North Dakota can have some pretty wild weather. High and low temperatures can swing from over 100 degrees in the summer to nearly 60 below zero in winter. Any and every type of severe weather can happen in between; and all that severe weather means homeowners file claims more frequently. Because claims are more frequent, costing insurance companies money, they raise premiums to compensate. But you might be able so save on your annual premiums by shopping around for the best deal.
Laws and Requirements
Legally, nobody who owns a home in North Dakota has to buy homeowners insurance. But you will likely need to purchase a policy before your bank will let you take out a mortgage on a property. If you own your home completely, you can choose whether or not to purchase insurance protection for it; but if you opt out, any and all damage to your house and property will be your responsibility.
Taking a Home Inventory
If you're having trouble taking your first home inventory, then you might want to search online for "home inventory checklist". These worksheets can help you get the ball rolling on taking a thorough and accurate home inventory. And you'll need one, too, before you purchase your policy. If not, and you guess wrong about how much coverage you need, it could end up costing you in the long run. This is true whether you underestimate or overestimate your coverage needs.
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Choosing What (and How Much) Coverage
In the course of a year, temperatures in North Dakota can fluctuate as much as 180 degrees or more from extreme heat in the summer to extreme cold in the winter. That sort of unpredictable weather means you will need all sorts of coverage for:
- Fires - Wildfires are becoming a bigger and bigger problem for many parts of the country, North Dakota included. Thankfully, HO-3 policies pay out claims on fire damage for both your structure and your personal property. No matter what, you're financially protected from fire.
- Floods - Even if you don't live near a major body of water, you should still think about purchasing some form of flood insurance coverage. The National Flood Insurance Program is a good resource, since most private insurance companies don't offer flood coverage - not even as an endorsement to an existing policy.
- Damage from Winter Storms - On your HO-3 policy, winter storm damage is covered for both your external structure and your personal property. It isn't excluded from Coverage A's "open perils" list, and it's included on the named perils that pertain to Coverage C - personal property.
- Covering Your Property - Speaking of Coverage C, there are 16 named perils on the list of things that, if they damage your personal property, your insurance company will honor a claim on. For any unnamed perils, you may have to ask your agent about a rider or an endorsement for additional protection.
- Liability Coverage - Sometimes, accidents happen on people's property. And, whether you believe so or not, you might be found legally culpable if the accident happens on yours. But you can rest easy knowing that the liability portion of your homeowner's insurance policy will help you pay for any related expenses.
- Umbrella Coverage - If you've been fortunate in life, you might just own a lavish enough home that requires more coverage than your insurance company is willing to sell you. In cases like these, umbrella insurance can bridge the gap. But such policies are usually reserved for people who need coverage in the millions of dollars (or more).
Replacement Cost vs. Actual Cash Value
Replacement cost and actual cash value are terms used to explain how much you can expect to collect when your insurance company honors a claim you file. Replacement cost claims pay out 100% of how much it costs to replace your damaged or destroyed property - usually the structure of your home. Actual cash value subtracts depreciation from the replacement cost of damaged property, which means you'll receive less than 100%. But you can ask your insurance agent for a replacement cost endorsement for your personal property if you want more coverage.
How Your Credit Score May Influence Your Rate
Did you know that your credit score can influence how much you pay in annual premiums for your home insurance policy? Obviously, the better your credit score is, the lower you can expect your rates to be. And in a state like North Dakota, anything you can do to help lower your premium will save you thousands over the life of your home.
Ask your prospective insurance company, even before they offer you a sample quote, how they conduct their credit checks. If you get too many "hard" checks on your credit history, it will lower your score and make it harder to get an affordable premium. On the other hand, if they only do "soft" checks, not only will it earn you a more favorable premium, but it won't leave any blemishes on your credit history.
For more information, feel free to click any of the links you see in this article. They all lead to more detailed information about homeowner's insurance, specifics on purchasing a policy, and how to find the best deal. You should also contact local resources in your state, such as:
Or contact them directly through the following resources:
North Dakota Insurance Department
600 E. Boulevard Ave.
Bismarck, ND 58505-0320
Toll free 800.247.0560