Is Minnesota a No-Fault State?

Minnesotans must carry no-fault coverage because the state is one of 13 no-fault states. In most no-fault states, like Minnesota, drivers must have a first-party medical benefit (FPMB) on their auto insurance policies.

No-fault laws can be difficult to understand, as they’re far less popular than tort laws. Let’s check out how the no-fault law affects drivers in the North Star State, what it means for those with a Minnesota car insurance policy, and the subtle nuances drivers will want to know about this law in their state.

Yes, Minnesota is a no-fault state for car insurance. In Minnesota, auto insurance is treated on a no-fault basis rather than a tort basis.

No-fault laws require drivers to have a minimum limit of the FPMB, personal injury protection (PIP), which policyholders will use to cover their own medical expenses should they be injured in an accident. The policyholder can use PIP regardless of who caused the accident, unlike most coverages that only protect the policyholder if they’re the victim in an accident.

While the Land of 10,000 Lakes is a no-fault state, drivers must still carry tort coverages. Auto insurance laws in the state require drivers to have at least $30,000 in bodily injury liability per person, $60,000 in bodily injury liability per accident, $10,000 in property damage liability per accident (30/60/10 liability coverage), $25,000 in uninsured and underinsured motorist bodily injury coverage (UMBI/UIMBI) per person, $50,000 in UMBI/UIMBI per accident, and $40,000 in PIP. Those who lease or finance their vehicles may also need collision and comprehensive coverages.

Drivers must always have a minimum liability coverage limit. While drivers will default to their PIP coverage for their medical expenses following an accident, drivers may reach their coverage limit quickly, especially in a severe accident. So, the fault will be assigned later so the victim may receive the at-fault driver’s liability coverage. 

Many drivers in no-fault states will notice higher premiums than the national average. This is because PIP can be costly to have on one’s policy due to the wide range of expenses it may cover. However, the average full coverage policy in the North Star State costs about $1,550 annually, or about 10% less than the national average of $1,670 annually. 

In Minnesota, the no-fault law was put in place for a few reasons. States will generally opt for a no-fault law if there’s an above-average population, population density, or population of uninsured drivers. 

However, Minnesota ranks about average in each category, making it a prime state for a tort system instead of a no-fault system. Still, the North Star State likely adopted the no-fault system to alleviate the court and insurance systems from an influx of claims. 

It makes sense why states with above-average populations, population densities, or populations of uninsured drivers may require their drivers to carry their own insurance coverage. With a high number of any of these populations, more drivers are on the road. Thus, the statistical likelihood of accidents increases, as does the burden placed on the claims and legal systems. 

However, this is just a trend. In the case of Minnesota, the state government likely wanted to alleviate the burden placed on the legal and insurance systems even though the burden isn’t as heavy as it is in other states. 

With a Minnesota no-fault law, insurance systems are more streamlined because policyholders can make their initial claims with their own policies. Legal systems also see fewer cases, as no-fault states tend to restrict drivers’ abilities to sue each other after an accident.

Yes, the North Star State is a no-fault state for car accidents. This means drivers will default to their PIP coverage to help cover their initial medical expenses following an accident, regardless of who caused it. However, drivers in the state must also carry liability coverage to help fill in the gaps should a victim’s expenses exceed their PIP limit. 

In tort states, drivers with minimum coverage policies typically only have other drivers to rely on for coverage, as most tort states only mandate liability coverage. Thus, drivers may be legally insured but, in an at-fault accident, completely lack coverage for their own expenses. 

While a minimum coverage policy in Minnesota provides some coverage for policyholders directly and some for those who may be injured in an accident they cause, not to mention it may also be the cheapest policy in the state, such minimal coverage may not be the best option for every driver. 

Many drivers opt for a full coverage policy from one of the state’s top insurers to ensure they’re protected in various accident scenarios while maintaining premiums at or below the state average. 

In Minnesota, no-fault insurance covers a wide range of medical expenses up to the policyholder’s limit. The law requires Minesotans to have at least $40,000 in PIP, with $20,000 of coverage allocated for immediate medical expenses and the other $20,000 for related medical costs, like long-term care. Drivers typically don’t carry more coverage than what’s legally required. 

Driving without sufficient insurance in the North Star State is illegal. Those who fail to maintain the minimum amount of legally required PIP may face fines, license and registration suspension, or even jail time. 

The legal penalties are only the tip of the iceberg regarding driving with inadequate coverage in Minnesota. Drivers who forgo PIP or the other required coverages also put their finances at significant risk, as the costs associated with an at-fault accident while uninsured will tally up quickly. That’s not to mention the insurance-related consequences of the crime, like needing to file for an SR-22 and being considered a high-risk driver for several years. 

Those who maintain sufficient PIP may be eligible for coverage of various medical expenses. Some expenses that PIP commonly covers are doctor’s visits, prescription medications, ambulance rides, hospital stays, diagnostic testing, and funeral costs, among others. Many insurers consider these expenses immediate medical expenses. Thus, policyholders have $20,000 in coverage for such costs. 

PIP may also cover more long-term costs like childcare, housekeeping, or loss of wages, depending on the specific details of the accident. These costs are considered related medical expenses by most insurers, for which policyholders may use the other $20,000 of their PIP coverage.

Drivers who’ve ever seen an American hospital bill may feel that $40,000 in PIP is a bit minimal. Those who would like more coverage for their medical expenses may opt for another FPMB on their policies, like medical payment coverage (MedPay). While MedPay and PIP are similar, PIP tends to cover a wider range of costs, like those long-term, related medical expenses. 

No, the Minnesota no-fault statute prevents it from being an at-fault state. At-fault states typically only require drivers to carry coverage that protects other drivers on the road and not coverage for their own expenses. At-fault coverage generally only covers the victim in an accident caused by the policyholder, while no-fault coverage covers the policyholder, regardless of who was at fault.

Although the Land of 10,000 Lakes is a no-fault state, drivers must also carry liability coverage. This is because simply relying on one’s PIP offers rarely enough coverage. The main difference between at-fault states or tort states and no-fault states, though, is that mandatory PIP. 

All drivers in the North Star State must adhere to the no-fault law by carrying at least $40,000 on their auto insurance policies. Whether you’re interested in adding additional no-fault coverage to your policy or seeking out a policy in Minnesota for the first time, the best way to find the right one for you is to get and compare quotes online. 

By comparing multiple auto insurance quotes, you can ensure you’re getting the most bang for your buck with your policy so that you can save your money for much more exciting things. 

Lucky for you, quotes are kind of our thing here at Clovered. We even offer a free quoting tool you can use to gather quotes faster than a Vikings fan can paint their face purple and gold. If you’d rather chat with a professional, you can contact one of our licensed agents at 833-255-4117 or [email protected].