Like most other states, Minnesota has laws about the minimum auto insurance drivers are required to have. These laws help ensure that all Minnesota drivers have protection in case of an automotive accident involving bodily injury, property damage, or both. Let’s explore what auto insurance is, who it covers, and Minnesota’s auto insurance laws.
What Is Auto Insurance?
Auto insurance is a protection plan that works by providing financial support when you have an accident. Insurance companies require drivers to pay a premium to ensure reimbursement in the unfortunate event of an auto accident. Auto insurance policies vary, and the amount you may collect after an accident depends on the circumstances your policy outlines.
Minnesota auto insurance laws outline precise minimum policy requirements for drivers, but you may choose to have additional coverages above and beyond what Minnesota laws require. Any other coverages you add to your auto insurance policy will provide you with more protection, but at higher premiums.
In Minnesota, most circumstances require drivers to have personal injury protection (PIP), liability, underinsured motorist, and uninsured motorist coverage. There are a few types of auto insurance coverage you will need to understand when purchasing a policy.
Minnesota Auto Insurance Laws
Even though Minnesota auto insurance laws require drivers to have a set minimum of PIP, liability, uninsured motorist, and underinsured motorist coverages, you can opt to increase these coverages. However, increasing required and optional coverages will increase your auto insurance policy premiums. Here are the basic requirements for auto insurance in Minnesota:
- Personal injury protection (PIP):
- $40,000 to cover per person per accident:
- $20,000 to cover hospital/medical expenses
- $20,000 to cover non-medical expenses
- $40,000 to cover per person per accident:
- Liability:
- $30,000 to cover injuries to one person
- $60,000 to cover injuries to two or more people
- $10,000 to cover physical damage to the other driver’s property or vehicle
- Uninsured:
- $25,000 to cover injuries for one person
- $50,000 to cover injuries for two or more people
- Underinsured:
- $25,000 to cover injuries for one person
- $50,000 to cover injuries for two or more people
Are you curious as to what these minimum coverages required by Minnesota auto insurance laws really mean? Let’s breakdown these different types of auto insurance coverage:
Personal Injury Protection (PIP or No-Fault Insurance)
One of the most unfortunate circumstances of an accident is personal injury. PIP, by design, provides you with basic benefits to cover any economic loss. If you get an injury in an accident, PIP coverage pays you and other members of your household as described by your policy. These payments help cover lost wages, replacement services, and medical expenses. PIP is a “no fault” coverage that pays out regardless of if you are or are not at fault for the accident.
As a means to ensure prompt treatment of accident victims and to ease the burden of courts, Minnesota has a no-fault law. Your no-fault benefits initially cover claims through your PIP. If your expenses exceed your PIP policy limits, you can file claims against the other driver’s insurance if they are at fault for the accident.
To have no-fault coverage for a snowmobile or a motorcycle, you will need to purchase additional insurance separate from your auto insurance policy. In addition, the policies you buy for your snowmobile or motorcycle won’t automatically include PIP coverage, but you can purchase it separately.
You will need to submit all no-fault claims during the first six months after an accident. You will also have to:
- Provide proof of expenses
- Complete an application for benefits
- Submit a medical examination (when required)
- Submit all bills to the insurance company when you get them
Liability
Auto accidents cause damage; how significant the damage is depends on the severity of the accident. Your liability insurance covers damage to another person’s car or property when you cause an accident. Liability also covers when other drivers file claims to your policy. Your policy’s limits define the amount your liability coverage pays.
Underinsured Motorist
In addition to your PIP coverage, underinsured motorist coverage pays up to your policy’s limits for the medical claims of individuals covered under your policy. Underinsured motorist coverage only applies when you are in an accident and the other driver is at fault, but they don’t have enough liability coverage. Your underinsured motorist coverage will pick up where the other driver’s liability cuts off.
Uninsured Motorist
After your PIP benefits max out, uninsured motorist coverage will cover your medical expenses. This applies when the other driver is at fault for the accident but has no auto insurance coverage or if you are the victim of a hit-and-run accident.
Optional Coverages
Minnesota auto insurance laws require PIP, underinsured motorist, and uninsured motorist insurance. In addition, the following two coverages are optional and will increase your auto insurance premiums:
- Collision: This additional auto insurance coverage will pay to repair damage to your vehicle after an accident with an object or another car.
- Comprehensive: For losses not related to a collision, comprehensive covers theft and damage from fire, vandalism, floods, accidents with deer, and falling objects.
Collision and comprehensive coverages have deductibles you must pay upfront before your auto insurance policy kicks in to cover damage or loss. You can typically choose how high of a deductible you want; the most common amounts are $250, $500, or $1,000. Higher deductibles result in lower premiums, just as lower deductibles result in higher premiums.
Though collision and comprehensive are optional by law, if you have a loan on your vehicle, the lienholder may require you to have collision and comprehensive coverage. If you choose to forgo these coverages, the lienholder can purchase the coverages and charge you for the expense. This can be extremely expensive and is known as “forced insurance.” Though this may not seem legit, it is the lienholder’s legal right to ensure that their investment is protected.
You will need to comply with Minnesota’s minimum auto insurance requirements to drive a motor vehicle in Minnesota. Any coverages you get above and beyond the requirements are left for you to decide, based on your personal preferences and what you can afford. Whatever you decide, you will most likely have questions and concerns. Our blog can help you find detailed information, such as how to find cheap car insurance in Minnesota and other informative material to help you as you strive to understand the ins and outs of auto insurance.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.
