Minnesota No-Fault Car Insurance Requirements

Minnesota has some of the most comprehensive no-fault car insurance laws in the country. In this article, we'll explain how no-fault car insurance works in Minnesota, and we'll summarize the types and minimum amounts of coverage that vehicle owners must carry.

Minnesota's No-Fault Insurance Laws

The Minnesota No-Fault Automobile Insurance Act became law in 1974. As in the dozen or so other no-fault states, drivers who have been injured in a car accident in Minnesota can get compensation under the "personal injury protection" (PIP) coverage of their own insurance policy, regardless of who was at fault for the accident. That's why PIP coverage is also known as "no-fault" coverage.

Besides the policyholder him/herself, PIP coverage applies to any relative who is living in the policyholder's home and who does not have a policy of his/her own. It also applies to the policyholder's spouse and children. Finally, anyone using the policyholder's car (with permission) is also covered (as long as they don't have insurance coverage of their own).

PIP protection covers (up to certain limits):

• medical bills incurred after car accident injuries
• disability and lost income resulting from a car accident, and
• the cost of replacement services (household chores, etc.) made necessary by a car accident
• funeral and burial expenses, and
• economic loss benefits for survivors.

In exchange for PIP protection, the law limits the situations in which policyholders and covered individuals may bring a liability claim against anyone who causes a car accident. In Minnesota, you can only step outside the no-fault system and file a third-party car insurance claim or personal injury lawsuit against another driver if:

• you've incurred at least $4,000 in reasonable medical expenses because of the accident, and/or
• you've suffered 60 days of disability, permanent injury, or permanent disfigurement.

And, even after one or both of the above thresholds is met, your liability claim against another driver can only be for amounts not covered by your PIP coverage.

Remember that vehicle damage claims don't fall under Minnesota's no-fault system. You're free to file a third party liability claim or even a lawsuit against the at-fault driver for any property damage caused by a car accident.

Finally, no-fault usually does not apply to motorcycle or snowmobile accidents. These vehicles can be insured, of course, but the policies will not typically include personal injury protection unless it is purchased separately.

Minnesota's Car Insurance Requirements

Minnesota requires vehicle owners who drive in Minnesota (or store their cars in the state) to carry personal injury protection (PIP) coverage, liability coverage, and uninsured/underinsured motorist coverage as part of a car insurance policy, in at least the minimum amounts listed below.

Personal Injury Protection (PIP)

• $40,000 per person, per accident (this amount consists of $20,000 for medical costs and $20,000 for non-medical costs, like lost wages)

Liability

• $30,000 per person for bodily injuries
• $60,000 per accident for bodily injuries (if more than one person is injured)
• $10,000 per accident for property damage

Uninsured Motorist

• $25,000 per person for injuries
• $50,000 per accident for injuries (if more than one person is injured)

Underinsured Motorist

• $25,000 per person for injuries
• $50,000 per accident for injuries (if more than one person is injured)

PIP benefits pay for the insured person's (and any other covered person's) medical and non-medical costs after an accident. In Minnesota, PIP also pays up to $2,000 for funeral expenses if the insured person or a passenger is killed in an auto accident.

Liability benefits, in contrast, pay for injuries and property damage caused by the insured person.

Uninsured/underinsured motorist coverage provides additional protection if one of the drivers involved in a crash carries no car insurance coverage or does not have enough liability benefits to cover others' injury or property damage. (For more information on how uninsured/underinsured motorist coverage works, see Uninsured Motorist Coverage: The Basics and Underinsured Motorist Coverage: How It Works.)

Special provisions in Minnesota's no-fault laws apply to rental cars. A rental car must be insured with at least $35,000 of property damage liability benefits. Rental agreements must also specify that the driver does not have to purchase additional rental insurance or waivers if the car is insured in Minnesota. Owners of their own private vehicles, however, are only required to purchase $10,000 of property damage liability insurance (though they are allowed to purchase more coverage if they want it).

More Information on Minnesota Car Insurance

The Minnesota Department of Commerce publishes a booklet that explains What You Need to Know About Auto Insurance. The Department also runs a Task Force on Minnesota No-Fault Auto Insurance Issues.