Residential property insurance rates in North Dakota are projected to jump 26% between 2025 and 2028, according to figures presented Monday in Bismarck by the American Property Casualty Insurance Association. This projected increase follows an average 14% rise that North Dakota property owners experienced between 2024 and 2025, Insurance Commissioner Jon Godfread stated.
Commissioner Godfread clarified during a North Dakota Residential Resiliency Roundtable that the 26% projection applies broadly, covering commercial, residential, and multi-family businesses, rather than solely residential policies. He described the projection as a serious signal for property owners across Burleigh and Morton counties, including Bismarck and Mandan.
Godfread attributed the rising insurance premiums in part to increasing costs for labor and materials. He explained that rising labor and material costs mean that even the same storm can cause more expensive damage, which ultimately translates to higher premiums. Despite these rising costs, Godfread noted that North Dakota remains a good risk state for insurance providers due to predictable weather patterns and fewer potential losses, which typically help to keep insurance costs down. However, he acknowledged that with North Dakota's population of 800,000, achieving economies of scale for insurers can be challenging.
A significant factor contributing to insurers’ caution, according to Godfread, is North Dakota's approach to building code enforcement. While the state has a statewide building code, there is no dedicated enforcement division to conduct inspections. Godfread noted that enforcement is typically handled by local communities, which means they are responsible for inspections to ensure buildings meet appropriate standards. He questioned the extent to which these local inspections are being carried out.
Godfread pointed out that fire inspections are conducted through the State Fire Marshal’s Office and local fire departments. However, these inspections focus solely on fire concerns and do not assess the types of materials used during construction or overall adherence to building codes. He added that construction contractors are generally responsible for ensuring new buildings follow building codes, and his office or the insurance industry often only discovers problems after a catastrophic loss or collapse.
Godfread stressed the need for action, stating that "Every citizen in North Dakota deserves safe buildings to go into." He added that the state needs to invest in inspections, mirroring practices in other parts of the country. While Godfread affirmed he was not accusing the construction industry of failing to follow the state’s building code, he underlined that the insurance industry lacks verification without proper inspections. He said this lack of enforcement can give insurers pause when determining rates.
The projected increases and underlying issues are also raising concerns among local real estate professionals and agricultural stakeholders. Jill Beck, CEO of the North Dakota Association of Realtors, voiced apprehension that homebuyers may not be adequately factoring increasing insurance rates into their home purchasing decisions. Beck also highlighted issues with older roofs, noting that some buyers are finding it difficult to secure insurance or mortgages for homes with dated roofing materials. She stressed the need to educate homesellers regarding the age of their roofs to prepare them for potential buyer challenges.
For the agricultural community, Brad Nold, chief claims officer for the North Dakota Farmers Union, advised caution against choosing insurance plans based solely on price. He warned that cheaper options might not provide the full coverage farmers need. Nold recommended that farmers meet with a licensed insurance agent, compare various plans, and thoroughly understand their policy before committing. He emphasized that education is paramount. Nold also suggested that farmers could consider not insuring older outbuildings as a strategy to manage costs, questioning the value of paying premiums for structures already nearing collapse.
Godfread also commended the state's efforts in mitigating potential flooding, citing significant projects in Grand Forks, Fargo, Minot, and the Garrison Dam. He indicated that the same level of energy and effort now needs to be directed towards community resiliency.
