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Understanding Minnesota’s No-Fault Accident System: What it Means for Auto Insurance Holders. As an independent insurance agent specializing in auto insurance, it is important to educate clients on the unique aspects of their state’s laws and regulations. In Minnesota, one of the most important aspects of auto insurance is the state’s no-fault accident system. Understanding how this system works and how it affects insurance holders is crucial for protecting oneself and one’s assets.

What is a No-Fault Accident State?

In a no-fault accident state, each driver’s own insurance company is responsible for covering their medical expenses and lost wages in the event of an accident, regardless of who was at fault. This means that even if you were not responsible for the accident, your insurance company will still be responsible for covering your expenses.

Minnesota is one of a handful of states that have adopted a no-fault accident system. This system was put in place to reduce the number of lawsuits resulting from auto accidents and to ensure that everyone involved in an accident receives the medical care they need, regardless of who was at fault.

How Does No-Fault Insurance Work in Minnesota?

In Minnesota, the medical benefit falls under personal injury protection (PIP) coverage. This coverage will pay for medical expenses, lost wages, and other expenses or essential services related to injuries you sustain in association with a motor vehicle, up to the policy limit, regardless of who was at fault.

You can be a driver, a passenger, a pedestrian, working on a car, getting in or out of a vehicle, and the coverage applies from your policy first.

The standard PIP coverage for medical expenses is $20,000, but it can be increased up to $50,000 and can be stacked or multiplied based on the number of vehicles insured. For example, if you insure three cars, the medical coverage can be up to $150,000 if stacked. Additionally, uninsured and underinsured motorist coverage is mandatory in Minnesota and can match the bodily injury coverage or liability limit.

While PIP coverage is mandatory, it is important to note that it pays first or is primary if you are injured. It also extends to other household members related by blood or marriage. If you injure another person, their PIP coverage will cover their expenses until the medical bills get to a certain threshold, and at that point, the other party can access your bodily injury coverages.

Protecting Yourself with Proper Coverage

While PIP coverage is required in Minnesota, it is important to consider additional coverage options to protect yourself and your assets in the event of an accident. One important coverage option to consider is liability coverage. Liability coverage will help to cover the costs of damages and injuries you may cause to others in an accident for which you are found to be at fault.

Another coverage option to consider is uninsured and underinsured motorist coverage. This coverage will protect you in the event you are involved in an accident with a driver who does not have enough insurance to cover your damages or who does not have insurance at all.

It is imperative you carry enough coverage to pay for potential damages to vehicles and persons because if you exhaust your coverages, then you are still liable for the excess damages.

As an independent insurance agent, we can work with you to assess your individual needs and find the right coverage options to protect you and your assets. By taking the time to understand how Minnesota’s no-fault accident system works and by having the right insurance coverage in place, you can rest assured that you are protected in the event of an accident.

We like to keep you informed of factors affecting your auto insurance
premium. In compliance with Minnesota law, This is an example document to show you the variables (effective October 13, 2022) we consider when rating your auto policy.

I am happy to discuss any of this information with you and how it affects your auto insurance rates. I have access to several auto insurance providers and can find one that will meet and exceed your coverage and rate expectations regardless of your driving record in the State of Minnesota.

ACCIDENT AND VIOLATION RATING PLAN

The rating system is designed to lower your premium as your driving record improves. Research shows that often drivers who have had accidents or violations have a higher future accident potential than other drivers. As a result, insurers generally charge higher premiums to drivers who have driving violations or “at fault” accidents. If your driving record is free from accidents or violations, you will pay a lower premium.

Driving Record Points

Each driver’s points will be associated with the auto he/she is assigned to. For Multi-Car Policies with only one driver, the driver’s points are assigned to the vehicle he/she most frequently operates. Each auto will be rated on the basis of the primary factors for all operators and the accident or violation records of all operators associated with that auto. The primary factors for each operator include gender, birth date, marital status, custody of children, and principal or occasional operator. Accident and violation surcharges are applied to Bodily Injury, Property Damage, Personal Injury Protection, Comprehensive, and Collision premiums.

Experience Period

The time period in which a chargeable accident or violation is counted is determined for a new or renewal policy as follows:

New Business Rating — 35 months ending on the effective date of the policy.
Renewal Rating — 35 months ending on the renewal date of the policy.

VIOLATIONS AND AT-FAULT ACCIDENTS

Certain violations or at-fault accidents resulting in injury, death or damage to property will result in a surcharge to your premium. The surcharge level is based on the number of violation points, the number of chargeable accidents in the experience period, and the amount of “time since the latest occurrence” for each.

Violation Points

Violation points are assigned as follows:
Three points shall be assigned for each conviction of a major violation during the experience period. Major violations are defined as follows:

Driving while in an intoxicated condition or under the influence of drugs, and also includes a driver’s license entry of “implied consent”, OR
Failure to stop and report when involved in an accident, OR
A felony involving the use of a motor vehicle, OR
Driving a motor vehicle in a reckless manner which results in an injury to a person, OR In an accident involving unlisted operators who are Named Insureds or drivers under a separate policy with our company. The point will follow the driver over to the other policy, OR
In an accident involving unlisted operators who are neither residents of the Insured’s household nor regular operators of his or her auto, OR
In an accident in which the auto is struck in the rear by another vehicle, and the Insured has not been convicted of a moving traffic violation in connection with the accident, OR
Involved in an accident resulting in an amount being paid under Personal Injury Protection with no payment made under Liability or Collision coverage.

Payments under the collision coverage will not be chargeable if there are valid grounds for subrogation. Occurrences resulting in both an accident and a violation shall be counted as follows:

If an occurrence results in both a chargeable accident and a minor violation, then only the chargeable accident is surcharged. If a minor violation and an accident result from the same incident and the accident does not meet the chargeable accident definition, then the incident will be treated as a minor violation.
If an occurrence results in both a chargeable accident and a major violation, then only the major violation is surcharged.

Accident surcharges decrease as the time since the latest chargeable accident increases. The “time since the latest chargeable accident” is defined to be the number of months between the chargeability date of the most recent chargeable accident assigned to a vehicle and the effective date of the policy for new business or the semi-annual due date of the policy renewals.

Accident Forgiveness

The first point resulting from an accident assigned to a vehicle will be waived if at the time:

The policy does not have any accidents currently being forgiven;
The Accident Forgiveness feature is active at the time of the accident, and
The Accident Forgiveness feature remains active.

Accident-Free Discount

This discount applies to drivers with continuous insurance and a verifiable driving record who have been free of chargeable accidents and major violations in the most recent five years. A driver with a surchargeable accident or major violation within the experience period would lose the accident free discount in addition to receiving the surcharge for the accident or violation.

ACCIDENT/VIOLATION SURCHARGE EXAMPLES

Please note that these examples are hypothetical and are meant only to illustrate how some of the possible surcharges may affect your premium.

EXHIBITS

The following exhibits illustrate how premiums are affected by accidents. The premium is shown for “no” accidents and for “one” and “two” chargeable accidents.
The premiums shown do not represent rates for any particular territory or policy.
In example A and B, the driver of vehicle #1 is a single male operator, age 30.

In example B, the driver of Vehicle #2

is a single female principal operator, age 22, without a Good Student discount

Any applicable coverage expense fees associated with any specific coverage are not surcharged. The coverage expense fee is a coverage level fee for administrating your policy. In order to not surcharge the coverage expense fee and appropriately apply the accident surcharge rating, we remove any applicable coverage expense fee, apply the appropriate accident surcharge, and then reapply any applicable coverage expense fee.

B. Two vehicles insured. Accidents are chargeable to the principal operator of vehicle number one, while operating vehicle number one. Multi-car discount applies.

Let me share a little personal gem with you: my grandfather always said, “Your car takes care of you; make sure you take care of it with proper insurance.” Join the ranks of satisfied clients who have taken this mantra to heart and entrusted their vehicles’ well-being with Prokop Insurance.

Don’t forget that the average driver spends about 17,600 minutes behind the wheel each year—that’s a whopping 293 hours! With such a considerable amount of time spent cruising the open road, wouldn’t it be a relief to know your car is protected by the best?

Don’t wait another moment to make an informed decision about your auto insurance. Start your journey with Prokop Insurance by contacting us now and gain peace of mind, knowing you’ve made the right choice.