The national Homeowners guide covers the ISO HO forms, coverages and exclusions. This guide covers Minnesota's homeowners statutes (Minn. Stat. 65A.27–65A.30), the residential cancellation rules in the Minnesota standard fire policy law (65A.01), the nonrenewal rules in Minn. R. 2880, and the Minnesota FAIR Plan.

What counts as a homeowners policy (65A.27)

For these rules, a "homeowner's policy" includes homeowners, mobile and manufactured home, dwelling owner, condominium owner and tenant policies.

Cancellation (65A.01, subd. 3a and 3c; 65A.29)

• Applicants receive a bold-print notice that the insurer may cancel for any reason not prohibited by law during the first 59 days (65A.29, subd. 13).
• After 60 days, or once renewed, a residential policy may be cancelled only for listed reasons, such as:
  • nonpayment
  • misrepresentation or fraud
  • an act that materially increases the risk
  • uncorrected physical changes that make the property uninsurable
• Notice:
  • At least 20 days for nonpayment or for a policy under 60 days old.
  • At least 30 days for other midterm cancellations.
• Cancellation isn't effective unless unearned premium is returned with the notice, or received by the cancellation date (65A.29, subd. 10).

Nonrenewal and reductions

• At least 60 days' notice, stating the specific reason, before an insurer refuses to renew, reduces limits or eliminates coverage (65A.29, subd. 7).
• Notices tell the insured about possible FAIR plan coverage, the right to object to the Commissioner, and any return of premium (65A.29, subd. 4).
• The insured may object in writing within 30 days. The Commissioner decides within 30 days (65A.29, subd. 9).
• Loss-based nonrenewal:
  • The insurer must first send written notice that future losses may lead to nonrenewal (65A.29, subd. 11).
  • Rule 2880.0200 allows nonrenewal for 2 or more losses in the 3-year experience period.
  • Losses from natural causes like lightning, wind or hail, losses with no payment, and losses at least 80% recovered through subrogation don't count.
• Weather losses: an insurer may nonrenew after 3 or more covered lightning, wind, rain or hail losses of more than $10,000 each in 5 years. Instead, it may offer a percentage deductible, with 60 days' notice and a flat-dollar option (65A.29, subd. 8a).
• Inquiries about a possible claim don't count as claims. Nonrenewing because of an inquiry is an unfair practice (72A.20, subd. 13).
• Known hazards: before nonrenewing for refusal to fix a known hazard, the insurer sends two written requests. The second warns of nonrenewal (Rule 2880.0200).
• Delinquent property taxes of 2 or more years are a permitted ground.
• An insured can't waive the right to a nonrenewal notice (Rule 2880.0400).

Underwriting and coverage rules

• Refusing, nonrenewing or charging differently solely because of the area or the age of the home is an unfair practice (72A.20, subd. 13).
• An applicant with an insurable interest may request in writing an offer or a written declination with the specific reason (65A.29, subd. 3).
• An agent who refuses to provide or submit a requested homeowners application for an insurer he or she represents commits an unfair practice (72A.20, subd. 14).
• Insurers must offer at least one form at each peril level that lets the insured set the amounts for Coverage B and C, with a lower premium (65A.295).
• Day care: coverage for a day care business must be added by rider. An insurer can't refuse a home solely because it has day care for 5 or fewer children (65A.30).
• Flood notice: every year, insurers send "Important Information About Damage Caused by Flooding," explaining that flood isn't covered and how to reach the NFIP (65A.302).
• Policy copies: a copy goes to the named insured within 21 days of a request (72A.20, subd. 42). Unearned premium on cancellation is refunded within 30 days (subd. 17).
• Lenders can't require coverage above the replacement cost of the buildings, or a particular agent or insurer (72A.31).
• Total loss: the insurer pays the whole policy amount for a total loss of a building, absent fraud or an unconsented increase in risk (65A.08).

Minnesota FAIR Plan (65A.32–65A.41)

• The plan gives fair access to property insurance for insurable property that can't get coverage in the normal market.
  • Anyone with an insurable interest who has been cancelled, nonrenewed or rejected may apply. Inspection is free.
• Agents can't bind FAIR plan coverage.
  • They may submit applications and earn a commission, but they are not agents of the plan.
  • Premium checks must be payable to the Minnesota FAIR Plan.
• The plan answers within 5 business days of a complete application.
  • It can't decline a risk because of neighborhood location or environmental hazards beyond the owner's control.
• Policies: written on standard forms for 1 year. Covered classes include fire, extended coverage, homeowners, condo and builders risk. Auto and commercial liability aren't covered.
• All property and liability insurers must participate.
• Appeals go to the board, then to the Commissioner within 30 days.

Common exam traps

• Cancel freely only in the first 59 days. Then: 20 days' notice for nonpayment or a new policy, 30 days for other reasons.
• Nonrenewal: 60 days' notice with the specific reason. Objections to the Commissioner within 30 days.
• Claim inquiries aren't claims. Weather losses don't count toward the 2 losses in 3 years rule.
• The age of the home or its area alone isn't a valid reason.
• Agents can't bind the FAIR plan.
• Insurers send an annual flood notice.