Minnesota's weather is becoming more dangerous and expensive.
Natural disasters gained frequency in Minnesota over the last 25 years, data from weather agencies and the insurance industry show. As a result, more Minnesotans are discovering that money-saving steps taken before one strikes your home or business are more important than ever.
On Tuesday, an extremely hot day in the southern half of the state was followed by a night of hurricane-force winds and thundershowers. More than 100,000 households lost power and an uncounted number experienced property and tree damage.
That paled against the derecho that pummeled the state on May 12. It produced a fast-moving giant wall of dust called a haboob in southwestern Minnesota and more than a dozen tornadoes up through the north-central part of the state. One person died and damage has exceeded $1.3 billion so far, according to the National Oceanic and Atmospheric Administration.
"It was like nothing I ever saw before," said Julie Rice, co-owner of Blade's Store, a general store on a lake in Holmes City, southwest of Alexandria, that was nearly destroyed by the derecho.
She was in the living quarters above the store when she noticed a 6-foot wall of water moving across the lake. She ran downstairs and corralled an employee and her mother from a nearby cabin into the basement of the 8,000-square-foot store and home. As they sheltered, a straight-line wind peeled the roof off the building.
When the storm calmed, Rice emerged, and saw a 100-year-old red elm tree toppled onto the cabin, a car and boat. The tree also ripped open the sewer line and cut a hole in the store building.
"My partner was driving over the hill home, and he saw the roof come flying off," Rice said. "As I was standing there looking at the tree, he told me the roof was gone, too."
Nationally, the Red Cross for years has gathered data on the growing number and intensity of weather disasters. Last year and so far this year, it responded to a major weather event, such as last week's flooding in Kentucky, every 10 days on average. A few years ago, it was every 21 days.
NOAA recorded 22 weather events that produced more than $1 billion in damage in 2020, 20 in 2021 and nine so far this year.
In Minnesota, insurance providers describe a turning point in 1998, when three major storms produced more than $1 billion in annual damage for the first time. One of those was the March tornado outbreak that devastated St. Peter and other towns in south-central Minnesota. It included an EF4 that remained on the ground for 67 miles, the most in state history.
"We've had a series of worst-years ever since," Mark Kulda, a vice president at the Insurance Federation of Minnesota. "We're averaging multibillion-dollar losses every couple of years now."
The state's costliest storm brought wind and hail on Anoka County in 2017. Over the next two years, insurers covered more than $3 billion in damages.
As insurers' payouts have risen, so have the premiums they charge Minnesotans. In 1998, the average Minnesota household paid $368 in homeowners' insurance. Now, it's just over $1,400, Kulda said. If the 1998 premium had just kept pace with inflation, Minnesotans would only be paying $600 a year.
Here are some ways to prepare and respond to disasters:
Make a plan, prepare a kit
The Red Cross teaches children as young as third grade to plan for a home fire or other emergency. Its lessons are timeless and work at home as well as in a business.
First step: Make some time once or twice a year as a family or business group to discuss what to do in case of an emergency. For a family, that includes how to regroup if disaster hits while separated, with kids at school and parents at work for instance.
"What is your plan to get back together? Where are you going to go? Take into account things like pets," said Tonia Teasley, regional CEO of the Red Cross in Minnesota and the Dakotas.
The Red Cross has several apps for smartphones, including one that alerts users to emergencies near them. It has an online assessment tool for businesses, called Ready Rating, to help them prepare for disasters.
"This is an effort we're not as well known for," Teasley said. "A business, organization or school can go on the website, answer questions and get a report that says, 'Here's your ready rating' and 'Here are things we suggest you work on.'"
The second step is to prepare an emergency kit. For families, that can mean water, nonperishable food, flashlight, battery-powered radio and documents with critical insurance and contact information.
For businesses, depending on size, a kit may include those items plus protective gear for employees.
Keep insurance updated
Make time once or twice a year to review property and disaster coverage with your insurance agent. Personal insurance plans need to be updated to account for changes in the value of property and assets. Commercial lines tend to work differently, with coverage and premiums based on business income.
"It's important to have a frequent conversation to make sure you have the right coverage," Kulda said.
When Rice bought Blade's Store six years ago, she kept the same insurance purchased by the previous owners, who ran the store for 46 years.
"The only way we got insurance was we just took over the same policy," she said. "We've got a building constructed in 1912 and added to in the 1970s. There's no insuring it for replacement value."
Property owners should take pictures or make videos of the possessions in a home or business at least once a year. Make backups of those images in a cloud service or on a memory stick that is somewhere off the property.
The same idea holds for copies of insurance documents. Kulda said one of the eye-opening lessons for Twin Cities insurers after the 2020 civil unrest was that many businesses lost important documents in fires.
"They might have had $2 million in inventory, but it was all burned up, the receipts were at the store and they had no photos," he said. "Insurers had difficulties coming up with the right claim amount."
When it happens, call your agent
After a disaster immediately call your insurance agent, who will get you started on a claim. Many providers have made the claims process easier with forms in an app or online.
Take notes and pictures to supplement your claim. Keep track of everything, especially receipts for goods and services as your home or business is rebuilt.
Stay patient with insurers. Payments don't always come at once, particularly for businesses.
"In a large, complex commercial claim, insurers make multiple payments," Kulda said. "Often, business owners get that first check and it's not as large as they thought it was going to be. They just need to keep the lines of communication open."
After the derecho swept through Holmes City in May, Rice called her insurance agent right away and learned he retired. A few weeks into the claim process, the adjuster she was working with sent an e-mail announcing his own retirement.
The building was "insured to the maximum amount that the insurance company was willing to cover," Rice said. The coverage is limited to the building's actual cash value, with depreciation based on its age.
"To this day, we don't know how much the expense of rebuilding this is going to be out of our pocket," Rice said.
Mind your personal trauma
A new roof was built atop the living quarters late last month. Completing the interior will depend on insurance payouts, Rice said. She's exploring other financial help.
"If we have to go get a mortgage to rebuild, there's not sufficient income generated from the store to support a mortgage payment," she said. "That's the scariest part for us."
The Red Cross has mental health professionals who volunteer to help in the immediate aftermath of a disaster, Teasley said. But the stress can go on for years as disaster victims rebuild.
"It's very traumatic to leave or lose your home or business," she said.
