What is “No-Fault” Insurance?
The Minnesota No-Fault Act governs the benefits of people injured in auto accidents. It provides for payment of your medical bills, a portion of your wage losses, and a number of other out-of-pocket losses if you are injured in an auto accident.
Because it is “No-Fault”, it doesn’t matter who caused the accident. Your own auto insurer (or the auto insurer of the vehicle in which you are riding or the insurer of the vehicle which caused you injury if you don’t have auto coverage) is responsible for paying these benefits. In addition to these benefits, you may also have the right to seek recovery for your pain and suffering, impairment of function, mental distress and other such damages from a negligent driver who causes you injury if you have a significant injury, as defined below.
All Minnesota drivers must have No-Fault insurance (except for motorcyclists). It is a misdemeanor to drive without insurance or to let someone drive your vehicle if you do not have insurance coverage.
In Minnesota, an auto insurer must provide liability coverage protecting you if you cause injury to another with a minimum of $30,000 per person or $60,000 per accident; minimum property coverage if you cause damage to another’s property up to $10,000; and uninsured/underinsured minimum coverage of $25,000 per person/$50,000 per accident in case you or an occupant of your car is injured by the negligence of an uninsured or underinsured driver. In addition, your auto insurer must provide the following minimum No-Fault or Personal Injury Protection (PIP) benefits:
- Medical coverage up to $20,000 per person for you or an occupant of your vehicle. You may choose your own physicians or chiropractors and the insurer must also pay mileage to/from treatment
- Wage loss and replacement services coverage totaling up to $20,000 which allows you to:
recover 85% of your wage losses up to $500/week;
recover up to $200/week for household help like lawn mowing, snow removal, housekeeping. A “primary home- maker” is entitled to $200/week while unable to do home- making chores even if she/he has no out-of-pocket losses;
receive death benefits for the loss of a family wage earner of up to $500/week, replacement services for the loss of a family member who provided such services of up to $200/wk and funeral costs up to $5,000.
These are the minimum coverages required in Minnesota. One should buy higher limits from one’s insurer. One in six to one in seven drivers are uninsured. Owners of more than a single vehicle are required to be offered No-Fault stacking by their insurers, which multiplies most No-Fault or PIP benefits, such as wage losses, medical bills, replacement services, etc.
You may also purchase optional coverages such as collision (pays for damage to your car regardless of who is at fault) and comprehensive coverage (pays for damage to your vehicle caused by fire, theft, vandalism or other perils).
You collect your No-Fault benefits from your own company, although if you are in a commercial vehicle you usually collect from that vehicle’s coverage. If you don’t have coverage of your own, the State will assign a company to cover you, unless your injury arises out of the use of an uninsured vehicle which you own.
You can make a claim against a negligent driver who causes you injury only if:
- you sustain permanent injury or,
- you have more than $4,000 in medical bills, not counting x-rays and other such diagnostic tests; or,
- you sustain disability for more than 60 days; or, you have permanent disfigurement or scarring; or,
In cases where the other driver is uninsured or is guilty of a hit and run, you do not have to show as serious an injury to recover.
If the other driver caused the accident, then her/his insurer is required to pay for your property damage, no deductible.
While you may ask your own insurer to pay for your property damage, if you have collision coverage, it is subject to your deductible. If you were partially at fault, then the other party’s insurer must pay the percentage of fault of its insured for your property damage.
You have no obligation to give a statement to the other person’s insurer. Your own insurer, however, may be entitled to take a statement from you; however, you should consult with an attorney before doing so. You do not have to sign a release to get No- Fault benefits paid. The insurer may take up to 30 days to pay.