Auto Insurance In Minnesota: What You Need To Know

Yes, auto insurance is required by law in Minnesota. The state has provisions for liability coverage, personal injury protection (PIP) and uninsured and underinsured motorist coverage. The minimum coverage requirements are $30,000 bodily injury liability per person, $60,000 bodily injury liability per accident, and $10,000 property damage liability per accident. Additionally, drivers must carry uninsured/underinsured motorist coverage and personal injury protection.

Minimum insurance requirements

Minnesota requires drivers to meet minimum insurance coverage requirements. The state mandates the following minimum amounts for coverage:

• $30,000 bodily injury liability per person and $60,000 per accident
• $10,000 property damage liability per accident
• $25,000 uninsured motorist bodily injury per person and $50,000 per accident
• $25,000 underinsured motorist bodily injury per person and $50,000 per accident
• $40,000 personal injury protection (PIP) per person

Liability coverage provides for your legal defence if a lawsuit is brought against you as a result of a covered accident. As a resident of Minnesota, your insurance policy must include two types of liability coverage: property damage and bodily injury. Property damage liability covers damage to another person's property or vehicle, while bodily injury liability covers certain expenses associated with bodily harm sustained by the other parties.

Personal injury protection (PIP) reimburses a portion of wage loss, medical expenses, and essential services incurred as a result of an accident to eligible injured parties, such as passengers or pedestrians. Minnesota is a no-fault state, which means that your own car insurance pays for your medical expenses and other out-of-pocket losses after a car accident, regardless of who was at fault. The no-fault system aims to lower the cost of car insurance by removing the need for lengthy and expensive legal processes to determine fault. The minimum no-fault coverage is $40,000, with up to $20,000 allowed for medical expenses and $20,000 for non-medical expenses.

Uninsured/underinsured motorist coverage protects you in the event of an accident where the other party is at fault and either doesn't carry insurance or is underinsured. This coverage helps pay for damages due to bodily injury that you and other passengers of your vehicle are legally entitled to from another driver who is not insured or is underinsured.

While Minnesota mandates minimum coverage amounts, it's important to consider your unique insurance needs. You may want to add optional coverages to your policy, such as collision coverage or comprehensive coverage, to enhance your protection on the road.

Liability coverage

In Minnesota, liability coverage is a legal requirement for motorists. This coverage includes two types: property damage liability and bodily injury liability. Property damage liability insurance safeguards your assets if you are legally responsible for a covered accident, including certain damage to another person's property or vehicle. On the other hand, bodily injury liability insurance protects your assets if you are found legally responsible for a covered accident, covering specific expenses related to bodily harm sustained by other parties.

The minimum liability coverage amounts mandated by the state of Minnesota are as follows:

• $30,000 bodily injury liability per person
• $60,000 bodily injury liability per accident
• $10,000 property damage liability per accident

Additionally, Minnesota is a no-fault state, which means that your insurance will cover your medical expenses and other out-of-pocket losses after a car accident, regardless of who was at fault. The no-fault system aims to reduce the cost of car insurance by eliminating the need for lengthy and expensive legal proceedings to determine fault. In Minnesota, the minimum personal injury protection (PIP) coverage limit is $40,000, which includes up to $20,000 in medical expenses and $20,000 for non-medical expenses, such as lost wages.

While liability coverage is essential, it is recommended to consider higher coverage limits for more comprehensive protection. Collision and comprehensive coverage are not legally required in Minnesota, but they can provide valuable protection for your vehicle in the event of accidents, theft, or other types of damage.

Uninsured/underinsured motorist coverage

Uninsured motorist coverage will pay for your medical expenses after you've exhausted your Personal Injury Protection (PIP) benefits. This type of coverage is essential as, on average, 12% of drivers in Minnesota don't have car insurance, and car accidents in the state can be extremely costly.

Underinsured motorist coverage, on the other hand, pays within stated limits for medical claims that are the fault of the other driver when they don't have enough liability coverage to reimburse your medical claims.

In Minnesota, the minimum coverage requirements for uninsured motorist bodily injury (UMBI) are $25,000 per person and $50,000 per accident. For underinsured motorist (UIM) bodily injury coverage, the same minimum coverage requirements apply: $25,000 per person and $50,000 per accident.

While these are the minimum coverage requirements, you may opt for more coverage to better protect yourself and your passengers in the event of an accident.

Personal injury protection (PIP)

PIP insurance covers a broad range of costs related to injuries sustained in a car accident, including medical expenses and non-medical economic losses. Under Minnesota law, medical expenses covered by PIP can include chiropractic services and transportation to medical care. It also covers lost income and household services costs. For lost income, PIP will pay a maximum of 85% of gross pay up to $500 per week. If you make $500 per week, you'll receive $425 per week until you return to work or reach your policy limit. If you make $588 or more per week, you'll receive the maximum of $500 per week. Any amount you earn, even part-time, will be subtracted from the payout you receive.

PIP also provides compensation for "replacement services," or chores and other unpaid household work that you're unable to do due to your injury. This can include housekeeping, grocery shopping, meal preparation, mowing, and shovelling. Replacement services benefits pay up to $200 per week and can be received seven days after the accident.

In the unfortunate event that someone on your policy is killed in an accident, funeral and burial costs of up to $5,000 are provided by PIP insurance. Surviving dependents, such as a spouse or children, can receive benefits of up to $500 per week in economic loss and up to $200 per week in replacement service loss benefits. These benefits continue until the limit is reached or the family member is no longer a dependent.

It is important to note that PIP coverage does not include compensation for pain and suffering, and it also excludes property damage, such as damage to your vehicle. These types of damages would typically be covered by the other driver's liability insurance or your own collision or comprehensive coverage.

The cost of PIP insurance in Minnesota can vary based on the amount of coverage and the deductible. Increasing your medical expense coverage will generally increase the monthly cost of PIP. However, reducing your deductible may only have a minor impact on your insurance cost, so eliminating the deductible if possible is recommended.

If you own multiple vehicles, you have the option to stack your PIP insurance. This means that the sum of your PIP coverage will apply regardless of which of your insured vehicles you are driving at the time of an accident. Stacking PIP coverage can be a cost-effective way to boost your overall coverage, as it provides a significant increase in coverage limits for a relatively small increase in monthly costs.

In conclusion, Personal Injury Protection (PIP) insurance is an essential component of auto insurance in Minnesota, providing financial protection for individuals and their passengers in the event of an accident, regardless of who is at fault. It covers a range of medical and non-medical expenses, with minimum coverage requirements set by the state. Understanding the benefits and limitations of PIP insurance can help individuals make informed decisions about their auto insurance coverage.

Penalties for driving without insurance

Driving without insurance in Minnesota is a misdemeanour and can result in serious penalties. The consequences of driving without insurance are not only legal but also financial, and they can be severe depending on the number of offences.

First and Second Offences

Fines for driving without insurance in Minnesota range from $200 to $1,000. For the first and second offences, the driver's license, registration, and license plates can be suspended for up to a year. To get your driving privileges reinstated, you must provide proof of insurance and pay a $30 reinstatement fee. There is also a possibility of up to a year in jail in addition to the fine, or the court may decide to impose either a fine or jail time. The court also decides whether the vehicle will be impounded.

Third and Subsequent Offences

If the third offence occurs within 10 years of two prior convictions, it is considered a gross misdemeanour. In this case, the driver's license, registration, and license plates will be suspended for up to a year, and a $30 reinstatement fee will be required to get them back. Additionally, there is a possibility of up to a year in jail and/or a maximum fine of $3,000 (with a minimum of $200). As with the first and second offences, the vehicle may be impounded.

Reducing or Eliminating the Fine

If you can provide proof of insurance coverage at the time you were pulled over, you may be able to have your citation dismissed. If you are found guilty of driving without insurance and cannot afford the fine, the court may allow you to perform community service instead.

SR-22 Insurance

Drivers who have had their licenses suspended in Minnesota are required to purchase SR-22 insurance to reinstate their licenses. This type of insurance is a certification of future proof of financial responsibility.

Compliance with Insurance Requirements

It is important to maintain continuous insurance coverage in Minnesota to avoid penalties and comply with state laws. Driving without insurance is not only illegal but also risky and can result in financial consequences if you are involved in an accident.

Frequently asked questions