Minnesota Auto Insurance: Understanding The Basics

Minnesota has a set of requirements for auto insurance that all drivers must follow. The state mandates a minimum coverage of $30,000 bodily injury liability per person, $60,000 per accident, and $10,000 property damage liability per accident. Additionally, drivers must carry uninsured/underinsured motorist coverage of $25,000 per person and $50,000 per accident, as well as $40,000 in personal injury protection (PIP). As a no-fault state, Minnesota requires drivers to have no-fault insurance, which covers medical expenses and lost wages resulting from a car accident, regardless of who is at fault.

Minimum insurance requirements

Minnesota requires drivers to carry a minimum amount of auto insurance. The minimum coverage includes liability insurance, personal injury protection (PIP), and uninsured and underinsured motorist coverage.

Liability Insurance

Liability insurance covers the other car and its passengers when you are at fault for an accident. The minimum coverage amounts are:

• $30,000 bodily injury liability per person
• $60,000 bodily injury to two or more people
• $10,000 property damage liability per accident

Personal Injury Protection (PIP)

PIP provides basic economic benefits in the event of an accident, regardless of who is at fault. In Minnesota, your minimum PIP must include:

$40,000 per person per accident ($20,000 for medical expenses and $20,000 for non-medical expenses)

Uninsured and Underinsured Motorist Coverage

Uninsured and underinsured motorist coverage protects you when the other driver is at fault and does not have enough insurance. The minimum coverage amounts for uninsured motorist bodily injury (UMBI) and underinsured motorist bodily injury (UIMBI) are:

• $25,000 per person
• $50,000 per accident

Liability coverage

Types of Liability Coverage in Minnesota

As a resident of Minnesota, your auto insurance policy must include two types of liability coverage: property damage and bodily injury. Each of these coverages plays a specific role in protecting you financially and legally after a covered accident.

Property Damage Liability Coverage

Property damage liability coverage is designed to protect you if you are found legally responsible for damaging another person's property or vehicle in a covered accident. This coverage ensures that the financial burden of repairing or replacing the damaged property is not solely your responsibility. It's important to note that this coverage only applies to certain types of damage and may not include all scenarios.

Bodily Injury Liability Coverage

Bodily injury liability coverage, on the other hand, focuses on safeguarding your assets if you are found legally responsible for causing bodily harm to another person in a covered accident. This coverage can help pay for various expenses associated with the other person's injuries, such as medical bills or lost wages. It's important to review your policy carefully to understand the specific benefits and limitations of your bodily injury liability coverage.

Minimum Requirements for Liability Coverage in Minnesota

The state of Minnesota has established minimum requirements for liability coverage that all drivers must meet. These requirements ensure that motorists have a basic level of financial protection in the event of an accident. Here are the minimum liability coverage limits:

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

These minimums are meant to provide a starting point for your auto insurance coverage, and it is generally recommended to consider higher coverage limits for more comprehensive protection.

Understanding No-Fault Coverage

It's important to note that Minnesota is a no-fault state when it comes to auto insurance. This means that your own insurance policy will cover your medical expenses and other out-of-pocket losses after a car accident, regardless of who was at fault. This system aims to streamline the claims process and reduce the need for lengthy legal battles to determine fault. However, it's still crucial to maintain adequate liability coverage to protect yourself financially in case you are found at fault for an accident.

Optional Add-On Coverages

While liability coverage is a mandatory component of your auto insurance in Minnesota, there are also optional coverages you can consider adding to your policy. These add-ons provide extra protection for various scenarios that may not be covered by the state-mandated minimums. Some of these optional coverages include collision coverage, comprehensive coverage, rental reimbursement, and roadside assistance. By carefully reviewing your needs and preferences, you can tailor your auto insurance policy to give you peace of mind while staying compliant with Minnesota's legal requirements.

Uninsured/underinsured motorist coverage

Uninsured motorist coverage will pay for medical expenses after you've exhausted your Personal Injury Protection (PIP) benefits. This insurance is used when the other driver is responsible for the accident but doesn't have insurance. Underinsured motorist coverage, on the other hand, pays within stated limits for medical claims that are the fault of the other driver when their liability coverage is not enough to reimburse your medical claims.

In Minnesota, the minimum coverage for uninsured/underinsured motorist insurance is $25,000 per person and $50,000 per accident. This means that if you are injured by a driver without insurance (or with insufficient insurance), your insurance will cover up to $25,000 of your medical expenses and other costs, and up to a total of $50,000 for all injured parties in the accident.

It's important to note that uninsured/underinsured motorist coverage typically only applies to bodily injury and does not cover property damage. Additionally, this coverage usually only applies if you are occupying a motor vehicle that is insured under your policy. If you are not in an insured vehicle at the time of the accident, you may be able to select any one limit of liability for any one vehicle covered by your policy.

While this coverage is mandatory in Minnesota, you have the option to purchase higher limits if you feel it is necessary to protect your financial assets and ensure you are sufficiently covered in the event of an accident.

Personal injury protection (PIP)

Minnesota's minimum PIP insurance requirement is $40,000 per person per accident, with $20,000 for medical expenses and $20,000 for non-medical expenses. PIP covers a broad range of costs related to injuries sustained in an auto accident, including medical expenses, non-medical economic losses, and losses related to the death of someone covered by the policy.

Medical expenses covered by PIP include all "reasonable expenses for necessary medical care" as a result of any injuries sustained in a car accident, such as broken bones, whiplash, or head trauma. Under Minnesota law, this can include chiropractic services and transportation to medical care.

In addition to medical costs, PIP coverage will reimburse you for lost wages and the costs of household services you would normally provide. For lost income, it pays a maximum of 85% of gross pay up to $500 per week. For example, if you make $500 per week, you'll receive $425 per week until you are well enough to return to work or you reach your policy limit. If you make $588 per week or more, you'll receive the maximum of $500 weekly. If you resume working, even part-time, any amount you earn will be subtracted from the payout you receive from PIP coverage.

You'll also be compensated for "replacement services," or chores and other unpaid household work you're unable to do as a result of your injury. This can include housekeeping, grocery shopping, meal preparation, mowing, and shovelling. Replacement services benefits pay up to $200 per week, and you can begin to receive them seven days after your accident.

If someone on your policy is killed in an accident, funeral and burial costs of up to $5,000 are provided by PIP insurance. In addition, surviving dependents (a spouse or children) can receive benefits. Survivors can receive economic loss benefits of up to $500 per week and replacement service loss benefits of up to $200 per week. These benefits continue until the limit is reached or the family member is no longer considered a dependent, such as when a child turns 18.

It's 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.

Collision and comprehensive coverage

While not legally required, these coverages are typically mandated by lenders for those financing or leasing a vehicle. They help pay for repairs or replacement in situations not covered by the state's minimum insurance.

When deciding whether to opt for collision and comprehensive coverage, consider the value of your car, the amount of driving you do (especially in high-traffic areas), and your current savings. If you live in an area with a higher risk of vehicle damage due to factors like fallen branches or animals, comprehensive coverage may be particularly worthwhile.

Frequently asked questions