Minnesota Car Insurance Laws, Explained

Minnesota Car Insurance Laws, Explained

How much auto insurance is required in Minnesota? What happens if a driver is uninsured?

Minnesota is 1 of a small handful of states that has a no-fault insurance system. Find out what this means for your accident claim.
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Automobile insurance provides drivers with a financial safety net. For a relatively small monthly premium, your insurance company will cover certain damages that result from a car accident.

Regardless of whether or not you want this financial protection, the state of Minnesota requires all drivers to purchase some auto insurance.

Let’s take a closer look at car insurance laws in the Land of 10,000 Lakes.

Does Minnesota have a fault-based or no-fault insurance system?

Broadly speaking, there are 2 types of insurance systems in the United States:

  • Fault-based insurance systems. In a conventional fault-based insurance system, injured parties pursue compensation for their injuries from the party responsible (at fault) for the accident.
  • No-fault insurance systems. In a conventional no-fault insurance system, injured parties first seek compensation for their injuries from their own insurance company regardless of who’s responsible for the accident.
Minnesota is 1 of a small handful of states to adopt a no-fault insurance system.
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The North Star State adopted its no-fault system in 1971 to help ease the burden of courts and to ensure prompt treatment for accident victims.

What are the minimum auto insurance requirements in Minnesota?

Minnesota requires that all drivers carry 4 types of auto insurance:

  1. Personal Injury Protection (PIP) provides basic economic loss benefits (such as medical expenses) if you’re injured in an accident. These costs are paid no matter who is at fault. Mandatory PIP coverage is what distinguishes Minnesota from states with fault-based insurance systems. 
  2. Liability insurance covers claims to your policy from another driver. It’s also the portion of your policy that covers damage to another’s vehicle when the accident is your fault.
  3. Underinsured motorist (UIM) coverage pays medical expenses for those covered by your policy (up to the policy limits). These benefits are in addition to your PIP benefits and are used when the other driver is held responsible for the accident and does not have enough liability coverage to cover your medical claims.
  4. Uninsured motorist (UM) coverage pays for your medical expenses after you have exhausted your PIP benefits and when the other driver is held responsible for the accident but is not covered by insurance.

Minnesota requires drivers to carry the above types of insurance in the following amounts:

Minnesota minimum auto insurance requirements
Personal injury protection (PIP) Liability insurance Underinsured motorist (UIM) coverage Uninsured motorist (UM) coverage
$40,000 per person per accident ($20,000 for medical expenses and $20,000 for non-medical expenses) $30,000 for injuries to 1 person

$60,000 for injuries to 2 or more people

$10,000 for physical damage to the other driver’s vehicle or for damage to property
$25,000 for injuries to 1 person

$50,000 for injuries to 2 or more people
$25,000 for injuries to 1 person

$50,000 for injuries to 2 or more people

If you have a loan on your vehicle, the lienholder may require you to carry additional types of insurance.

What factors affect my insurance premiums?

A number of factors affect the insurance premiums you pay. These include the driver’s:

  • Age (teenagers and the elderly pay more for coverage on average)
  • Gender (males pay more for coverage on average)
  • Mileage (the more you drive, the higher your premium)
  • Type of vehicle (certain vehicles are more expensive to insure)
  • Location (coverage is more expensive in cities on average)
  • Driving record (a poor driving record will almost always result in higher premiums)
Find the best deal by shopping around. Also, be sure to ask insurance companies whether you’re eligible for any discounts. For example, some insurance companies offer discounts to “honor roll” students.

What are the penalties for driving without insurance in Minnesota?

Driving without insurance in Minnesota is considered a misdemeanor offense, which is punishable by fines of up to $3,000, up to 90 days in jail, and license suspension for up to 12 months.

On top of the fines, license suspension, and possible jail time, uninsured drivers will be personally responsible for any damages they cause in an accident.

Drivers must provide proof of insurance at the request of a police officer. An electronic insurance card (such as a copy of your insurance card on your smartphone) is sufficient.

Enjuris tip:Providing proof of insurance through an electronic device does NOT constitute consent for the police officer to access other content on the electronic device.

What optional insurance coverage is available?

Along with additional liability insurance, drivers in Minnesota can purchase the following optional coverage:

  • Comprehensive coverage provides coverage for losses other than those caused by a collision (vandalism, falling objects, fire, etc.)
  • Collision coverage provides coverage for damage to your vehicle caused by an accident with another vehicle or an object (such as a fence)

Do I need to purchase separate auto insurance when I rent a car?

In most cases, you don’t need to purchase separate auto insurance when renting a car in Minnesota.

Minnesota law (Minn. Stat. § 65B.49) requires every auto insurance policy to include a minimum of $35,000 in coverage—without a deductible—for damage to a rental car.

What’s more, your PIP coverage will apply if you’re injured while driving a rental car.

How does insurance work when a friend or family member borrows my vehicle?

What happens if your friend or family member gets in a car crash? Are you responsible for the damages?

It happens all the time.

As is often the case when it comes to the law, the answer depends on a number of factors.

If the person you loaned your car to had PIP insurance, their physical injuries will be covered under their policy (not yours).

However, if the person you loaned your car to did NOT have PIP coverage and no one in their household had PIP coverage, their injuries will be covered under your PIP policy.

When it comes to damage to the vehicle, your car will always be covered under your own policy if you have comprehensive or collision coverage. Under certain circumstances, however, the policy covering the other vehicle involved in the crash may pay for damage to your car. Check your policy under the definition of “your covered auto” for more details.

How do I file an insurance claim after a car crash in Minnesota?

If you’re injured in a car accident in Minnesota, you’ll need to take the following steps to recover damages (depending on the nature of the accident):

  • Contact your insurance agent to file a claim under your PIP coverage (regardless of who was at fault for the accident).
  • If your PIP coverage runs out and the accident was caused by another driver, contact the at-fault driver’s insurance company and make a claim against their liability insurance policy. You can also make a claim for property damage to your vehicle this way.
  • If your damages exceed the at-fault driver’s liability coverage, make a claim on your underinsured benefits.

If the at-fault driver has no insurance, you can make a claim on your uninsured motorist policy once your PIP coverage runs out.

Enjuris tip:In Minnesota, an auto insurance company has 30 business days to accept, deny, or give a reason why it cannot accept your claim. If your auto insurance company is unresponsive, you may need to file a bad-faith lawsuit.

If your accident involves serious physical injuries, it’s a good idea to contact a personal injury attorney. Many people assume that lawyers are only helpful if you wish to sue someone, but in reality they can help you obtain maximum compensation in a number of ways that don’t always involve taking your case to court. A personal injury attorney can help you accurately determine the value of your case, negotiate with insurance companies and, of course, sue the at-fault driver if it comes to that.

Find an experienced personal injury attorney in your area using our free online directory.


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