Most people buy insurance once, file the paperwork, and never look at it again until they need it. That's when they discover what they actually bought — which is a bad time to find out.
This is a plain-language walkthrough of the main personal insurance policies, what each one does, and how to think about coverage levels without paying for things you don't need.
Auto Insurance
Minnesota requires four coverages, and the state minimums are low:
- Bodily injury liability — $30,000 per person / $60,000 per accident
- Property damage liability — $10,000 per accident
- Personal injury protection (PIP) — $40,000 ($20,000 medical, $20,000 wage loss)
- Uninsured/underinsured motorist — $25,000 per person / $50,000 per accident
Minnesota is a no-fault state, which means your own PIP pays your medical bills after an accident regardless of who caused it. You can only sue the at-fault driver once your injuries cross certain thresholds.
The state minimums are genuinely inadequate. A single serious injury routinely generates medical bills beyond $60,000, and $10,000 doesn't replace a modern vehicle. Anything above the limit comes out of your pocket, and judgments follow you.
Reasonable liability limits for most Minnesota households: $250,000/$500,000 bodily injury and $100,000 property damage. The premium difference from state minimums is usually far smaller than people expect — often $10 to $20 a month.
Optional coverages worth understanding:
Collision pays to repair your car after a crash regardless of fault. Comprehensive covers everything else — theft, hail, fire, vandalism, hitting a deer, a falling branch. In Minnesota, comprehensive earns its keep on hail and deer alone.
Both carry deductibles. If your car is worth less than a few thousand dollars, dropping collision may make sense. Comprehensive is cheap enough that it's usually worth keeping regardless.
See our full auto insurance page for more detail.
Homeowners Insurance
A homeowners policy is really five coverages bundled together:
- Dwelling (Coverage A) — the structure itself, at rebuild cost
- Other structures (B) — detached garage, shed, fence; usually 10% of dwelling
- Personal property (C) — your belongings; usually 50–70% of dwelling
- Loss of use (D) — hotel and living costs while your home is uninhabitable
- Personal liability (E) — injuries to others and damage you cause
Two things determine whether the policy actually protects you: whether it's written on replacement cost (not actual cash value), and whether the dwelling limit reflects current construction costs.
Standard exclusions that surprise people: flood, earthquake, sewer backup, mold beyond limited amounts, and normal wear and tear. Sewer backup in particular is a common Minnesota claim and requires a cheap endorsement.
More on our homeowners insurance page.
Renters Insurance
Your landlord's policy covers the building. It covers nothing of yours and none of your liability.
Renters insurance covers your belongings, your liability if you injure someone or damage the unit, and your additional living expenses if the place becomes uninhabitable. It typically costs $12 to $20 a month.
People consistently underestimate what their belongings are worth. Add up furniture, electronics, clothing, kitchen items, and sports equipment and most renters land between $20,000 and $30,000.
See the renters insurance page for details.
Umbrella Insurance
An umbrella adds liability protection above your home and auto limits. If a claim exceeds your underlying policy, the umbrella covers the excess.
A million dollars of coverage typically costs $150 to $250 per year — the best value in personal insurance. It matters most if you have teenage drivers, a pool, a dog, rental property, recreational vehicles, or meaningful assets and future income to protect.
More on the umbrella insurance page.
Life Insurance
Two broad categories:
Term life covers a set period — commonly 10, 20, or 30 years — and pays only if you die during that term. It's inexpensive and it's what most families need. A healthy 35-year-old can often get $500,000 of 20-year term for around $25 to $35 a month.
Permanent life (whole or universal) covers you for life and builds cash value. It costs substantially more and makes sense in specific estate-planning or business situations, not as a default.
A common starting framework for coverage amount: enough to pay off the mortgage, cover remaining debts, fund your children's education, and replace roughly 10 years of income.
See the term life insurance page.
How to Think About Limits Without Overpaying
The general principle: insure what would financially devastate you, not what would merely annoy you.
That means:
- Carry high liability limits. This is the coverage that protects everything you own and everything you'll earn. It's also the cheapest coverage per dollar of protection.
- Take higher deductibles. If you can comfortably absorb a $1,000 or $2,500 deductible, raising it lowers your premium meaningfully. Insurance should handle catastrophes, not minor repairs.
- Don't file small claims. A $900 claim on a $500 deductible nets you $400 and can raise your rates for three to five years. Do the math before filing.
- Bundle. Multi-policy discounts are usually the largest single discount available.
- Review annually. Life changes — a new driver, a home renovation, a business, a marriage — all change what you need.
Why the Agent Matters
A captive agent represents one company and can only offer you that company's product at that company's price. An independent broker submits one application and compares multiple carriers.
Rates for identical coverage vary substantially between carriers, and each one weighs your profile differently. The company that's cheapest for your neighbor may be expensive for you.
If you'd like someone to walk through what you currently have and tell you honestly where the gaps and the overpayments are, call me at 651-243-0056. No cost, no obligation.