No-Fault Insurance Basics for Minnesota Auto Accidents

No-fault personal injury protection (PIP) coverage is required by Minnesota law and provides basic economic loss benefits for losses sustained “…through injury arising out of the maintenance or use of a motor vehicle.” Minn. Stat. §65B.44 Subd.1(a). These benefits are paid by one’s own automobile insurance carrier without regard to “fault”; it does not matter who is to blame for the accident. No-fault insurance does not cover general damages, such as pain and suffering; those damages may be compensated through a separate liability claim an injured party may make against an at-fault party, subject to certain limitations, in cases involving serious injury.

In Minnesota, your own auto insurance policy is required to include a minimum of $20,000 for medical coverage and an additional $20,000 for “…wage loss, replacement services loss, funeral expense loss, survivor’s economic loss, and survivor’s replacement services loss arising out of the injury to any one person.” Minn. Stat. §65B.44 Subd.1(a). The amount that is actually paid to an injured party in these two categories is subject to various limitations, including deductibles and actual expenses/losses incurred.

The $20,000 medical coverage portion of no-fault benefits covers prescriptions, doctor’s visits, transportation expenses to and from doctor’s visits, physical therapy, chiropractic care, and other medical costs.

The second $20,000 portion of no-fault insurance includes:

1. Disability and income-loss benefits: 85% of an injured individual’s weekly rate of wages or unemployment benefits up to a maximum of $500/week for income losses resulting from injuries attributable to an auto accident. The injured individual cannot receive unemployment benefits while also receiving no-fault wage-loss benefits, but may receive vacation pay or another exhaustible benefit such as long- or short-term disability.
2. Service replacement benefits: up to $200/week to cover the cost of paying someone to complete tasks at home that the injured party can no longer complete. In order to qualify for replacement benefits, the injured individual must show that work was for tasks he or she previously completed and the rate must be reasonable.
3. Death and survivors’ benefits: includes funeral and burial expenses up to $5,000; a $500/week benefit to surviving dependents to allow recovery for pecuniary damages, such as loss of income they would have otherwise received from the decedent; and up to $200/week in replacement service benefits for survivors to pay for services that would have otherwise been performed by the decedent.

Minnesota law allows the $20,000 PIP benefits to be “stacked” to provide for higher coverage. If an injured party owns more than one vehicle and pays an additional premium, the coverage could be multiplied by the number of covered vehicles. For example, if you own and insure three vehicles and pay an additional premium, the no-fault coverage could be increased to $60,000 for both medical and wage loss. This would also increase the weekly coverage for wage loss from $500 to $1,500.

No-fault insurance claims are separate from third-party actions, such as negligence claims. Third-party actions may apply in auto accidents involving serious injury resulting from the negligence of another party. In order to have an action for general damages, the injured individual must either (1) have a permanent injury; (2) have an injury that results in at least $4,000 in medical expense, excluding diagnostic testing; (3) experience sixty days of incapacity or disability, meaning there is an inability to substantially perform any of your daily activities for a total of sixty non-consecutive days; or (4) have a permanent disfigurement, which includes, but is not limited to: scars caused by the accident or surgery necessitated by the accident; burns; or road rash.

Minnesota drivers’ auto insurance policies follow them out of the state; drivers with Minnesota auto insurance coverage can collect no-fault benefits for an auto accident that occurred while driving out of state.

It’s important to note that no-fault benefits apply not only to crashes, but also to other situations in which injuries involve a motor vehicle. For example, if you are injured while occupying, entering into, and/or alighting from a motor vehicle, those injuries may be covered under no-fault law.

No-fault insurance is a complex area of Minnesota law and this article is written to give the reader a starting point in understanding no-fault benefits. It is not legal advice. If you or someone you know has been injured and is in need of legal advice, please call us today so that we can give you a detailed assessment of how no-fault law may affect your situation.