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.