Auto insurance costs are neither very high, nor very low in Minnesota. At $1432, Minnesota’s average annual insurance rate is merely $64 below the national average, $1496. However, these rates can be gravely affected by drunk driving charges on your driving record.
In Minnesota, driving while intoxicated (DWI) is a serious offense, and can result in fines as well as jail time. The fourth DWI on your record will cost you your driver’s license, and the fourth DWI within a 10 year period will be considered a felony. In addition to these legal repercussions, your insurance carrier will increase your premium from $1432 to $2664 in Minnesota. In Minneapolis, your insurance rate will increase from $1376 to $2559.
St. Cloud is the most affordable auto insurance zip code in Minnesota. The average annual insurance rate in St. Cloud is $956. However, a DWI in St. Cloud will increase your insurance rate to $1778 per year. Minnetonka, Mankato, and Rochester are also affordable cities to buy auto insurance, with average annual insurance rates of $969, $981, and $986, respectively. However, a single DWI on your record in these cities will shoot your premium up to $1802, $1825, and $1834.
| City/ State |
Zip code |
Average Annual Insurance Rate ($) |
Average Annual Premium after a DWI Conviction ($) |
Average Annual Premium after an accident ($) |
| St. Cloud |
56301 |
956 |
1,778 |
1,177 |
| Minnetonka |
55305 |
969 |
1,802 |
1,193 |
| Mankato |
56001 |
981 |
1,825 |
1,208 |
| Rochester |
55901 |
986 |
1,834 |
1,214 |
| Edina |
55410 |
1,024 |
1,905 |
1,261 |
| Bloomington |
55420 |
1,037 |
1,929 |
1,277 |
| Eden Prairie |
55343 |
1,058 |
1,968 |
1,303 |
| Duluth |
55802 |
1,063 |
1,977 |
1,309 |
| Saint Paul |
55101 |
1,316 |
2,448 |
1,621 |
| Minneapolis |
55415 |
1,376 |
2,559 |
1,695 |
| Minnesota |
55959 |
1,432 |
2,664 |
1,764 |
It is evident from the above table that one accident on your record has a lower impact on your insurance premiums, compared to DWIs. Also, DWIs will cost you a higher premium for at least three years since the date of the offense.
In 2010, the average auto insurance expenditure in Minnesota stood at $693.08 and was almost a $100 cheaper than the countrywide average of $791.22. Minnesota’s 2010 average figure represented a rise of 50.5 percent over its 1989 average ($460.41). In the same period, the countrywide average went up by 43.3 percent. Despite the faster rise in costs, auto insurance expenditure in Minnesota was still cheaper than the countrywide average as of 2010. Furthermore, Minnesota went from being the 26th most expensive state in terms of auto insurance to the 32 most expensive.
The figures above were obtained from the November 2013 study released by the Consumer Federation of America. This study found that when taken in comparison with states such as California and Hawaii, Minnesota’s performance does not measure up quite so well. In the same 21 year period, auto insurance costs in California went down by 0.3 percent, the only state where costs went down. Hawaii did well too. Costs there rose by only 13.7 percent. The study concludes that states that had stringent auto insurance regulation, such as California and Hawaii, demonstrated the most success in keep rates rises lower.
Currently, Minnesota employs a File and Use (F&U) system which requires insurers to file rates changes before using them in the market. In contrast, California employs a much stronger regulatory system called Prior Approval (PA). Under the PA system, insurers are not merely required to file rates changes before use. They have to also obtain approval from the state for rates changes before they can be implemented.
Implementing a PA system will benefit consumers in Minnesota, as per the study. Moreover, it was found that stronger regulatory systems do not adversely affect the profitability of the insurers. To illustrate, profitability in states that employed the PA system was 9.4 percent whereas states that employed the F&U system saw a profitability of 7.7 percent. Stronger regulatory systems, therefore, make sense for all involved.
