Minnesota Auto Insurance Requirements

Minnesota law requires all drivers to carry specific auto insurance coverages and maintain proof at all times.

Minnesota No-Fault Auto Insurance

What is No-Fault Insurance?

Minnesota is a no-fault state under Minnesota Statutes Chapter 65B:

Key Principles:

• Your own insurance pays your medical expenses and lost wages
• Regardless of who caused the accident
• Limits ability to sue other drivers for minor injuries
• Reduces litigation and speeds payment of claims

How No-Fault Works:

1. After Accident: Each driver files claim with their own insurance
2. PIP Pays: Personal Injury Protection (PIP) covers medical bills and lost wages
3. Property Damage: Still follows traditional fault system
4. Serious Injuries: Can sue if injury meets "serious injury threshold"

Contrast with Tort States:

• Tort states (like Nevada): At-fault driver's insurance pays
• No-fault states (like Minnesota): Your own insurance pays regardless of fault
• Hybrid: Minnesota is no-fault for bodily injury, tort for property damage

Exam Tip: Minnesota is a no-fault state for bodily injury (your own insurance pays) but a tort state for property damage (at-fault driver's insurance pays). Know the difference!

Compulsory Insurance Law

Minimum Required Coverages

Minnesota requires ALL drivers to carry these minimum coverages:

Expressed as: 30/60/10 liability + $40K PIP + 25/50 UM/UIM

Exam Tip: Minnesota requires MORE types of coverage than most states. Memorize: 30/60/10 liability, $40,000 PIP, and 25/50 UM/UIM. All are mandatory.

Personal Injury Protection (PIP)

Minimum Required: $40,000 per person, per accident

Breakdown:

• Medical Expenses: Up to $20,000

  • Doctor visits, hospital stays
  • Rehabilitation and physical therapy
  • Ambulance services
  • Dental treatment from accident
  • Prosthetics and medical devices

• Non-Medical Expenses: Up to $20,000

  • Lost wages (up to $20,000)
  • Replacement services (housework, childcare)
  • Funeral expenses (if applicable)

Who Is Covered:

• Named insured and resident relatives
• Passengers in your vehicle
• You as pedestrian struck by vehicle

When PIP Pays:

• Regardless of who caused accident
• No need to prove fault
• Pays quickly (within 30 days of proof of loss)
• Primary coverage (pays before health insurance in most cases)

PIP Exclusions:

• Injuries from motorcycle (motorcycles excluded from no-fault)
• Injuries while committing a felony
• Injuries in vehicle used as public/livery conveyance
• Work-related injuries covered by workers' compensation

Exam Tip: Minnesota's $40,000 PIP minimum is split $20,000 medical and $20,000 non-medical. PIP pays YOUR expenses regardless of fault—that's the core of no-fault insurance.

Optional PIP Deductibles

Reducing PIP Premiums:

• Insureds can elect deductibles to lower premiums
• Deductibles apply to medical expenses only
• Common deductibles: $250, $500, $1,000
• Often coordinated with health insurance

Coordination with Health Insurance:

• Insureds with health insurance may choose to:
  • Use health insurance as primary
  • PIP as secondary (excess coverage)
  • Reduces PIP premiums
  • Health insurance deductibles still apply

Liability Coverage

Bodily Injury Liability: 30/60

• $30,000 per person: Maximum paid to one injured person
• $60,000 per accident: Maximum paid to all injured persons in one accident
• Covers injuries to OTHER people when you're at fault
• Includes legal defense costs (unlimited)
• Covers settlements and judgments

Property Damage Liability: $10,000

• Damage to OTHER people's property when you're at fault
• Vehicles, buildings, fences, other structures
• Does NOT cover damage to your own vehicle

What Liability Coverage Does:

• Pays claims against you
• Provides legal defense
• Negotiates settlements
• Pays court judgments
• Protects your assets

Exam Tip: Liability coverage protects you from lawsuits when YOU cause injury/damage to OTHERS. PIP protects YOU from your own medical bills. These are different purposes!

Uninsured/Underinsured Motorist Coverage

Required Minimums: 25/50 UM/UIM

Uninsured Motorist (UM): 25/50

• $25,000 per person, $50,000 per accident
• Covers you when hit by driver with NO insurance
• Covers you as pedestrian hit by uninsured vehicle
• Covers hit-and-run accidents
• Also covers you if hit by vehicle with insolvent insurer

Underinsured Motorist (UIM): 25/50

• $25,000 per person, $50,000 per accident
• Covers you when at-fault driver's limits are insufficient
• Makes up difference between their coverage and your damages
• Only pays excess over at-fault driver's coverage

Example: UIM Coverage

• Your injuries: $75,000
• At-fault driver's liability limit: $30,000
• Your UIM coverage: $50,000
• You receive: $30,000 (their liability) + $45,000 (your UIM) = $75,000 total

Why UM/UIM Is Important:

• Approximately 12% of Minnesota drivers are uninsured
• Many drivers carry only minimum limits
• Protects you and your family
• Relatively inexpensive coverage

Exam Tip: UM covers NO insurance, UIM covers INSUFFICIENT insurance. Minnesota REQUIRES both at 25/50 minimums. Most agents recommend higher limits matching liability coverage.

Proof of Insurance Requirements

Required at All Times

Must Show Proof:

• Valid insurance identification card (physical or electronic)
• To law enforcement upon request
• After any accident
• At DMV for registration
• During traffic stops

Acceptable Proof:

• Insurance ID card from insurer
• Electronic proof on phone (insurer app or email)
• Not acceptable: Photo of card, expired documents

Penalties for No Insurance

First Offense:

• Minimum $200 fine (up to $1,000)
• License plate impoundment
• Vehicle registration suspension
• Proof of insurance required to reinstate

Subsequent Offenses:

• Higher fines
• Extended suspension periods
• Possible vehicle impoundment
• SR-22 certificate requirement

After At-Fault Accident Without Insurance:

• License suspended 90 days minimum
• Must pay damages out of pocket
• SR-22 required for 3 years after reinstatement
• Cannot register any vehicle until compliance

Exam Tip: Driving without insurance in Minnesota results in fines, license suspension, and plate impoundment. After an at-fault accident without insurance, the driver faces 90-day suspension and 3-year SR-22 requirement.

No-Fault Serious Injury Threshold

When You Can Sue

Under Minnesota no-fault law, you can sue the at-fault driver only if injuries exceed the serious injury threshold:

Economic Losses:

• Medical expenses exceed $4,000
• Permanent injury or permanent disfigurement
• Death

Non-Economic Damages:

• If injury meets threshold, can sue for:
  • Pain and suffering
  • Emotional distress
  • Loss of enjoyment of life
  • Loss of consortium

If Below Threshold:

• Cannot sue for non-economic damages
• PIP covers economic losses only
• Reduces litigation
• Speeds compensation

Why the Threshold Exists:

• Prevents lawsuits for minor injuries
• Reduces court costs and insurance expenses
• Ensures serious injuries can still seek full compensation
• Balances no-fault benefits with tort remedies

Minnesota Auto Insurance Policy Structure

Standard Minnesota Auto Policy

Part A - Liability Coverage (Required 30/60/10 minimum):

• Bodily injury liability
• Property damage liability
• Legal defense costs
• Covered persons: Named insured, resident relatives, permitted drivers

Part B - Personal Injury Protection/PIP (Required $40,000 minimum):

• Medical expenses up to $20,000
• Non-medical expenses up to $20,000
• No-fault coverage
• Covers insured, family, passengers

Part C - Uninsured/Underinsured Motorist (Required 25/50 minimum):

• UM: Covers injuries from uninsured drivers
• UIM: Covers injuries when at-fault driver's limits inadequate
• Hit-and-run coverage included

Part D - Coverage for Damage to Your Auto (Optional):

• Collision: Damage from collision
• Comprehensive (Other Than Collision): Theft, vandalism, fire, weather, animals
• Both require deductible

Part E - Duties After an Accident:

• Notice requirements
• Cooperation with investigation
• Submit to medical examinations
• No admission of fault without insurer consent

Exam Tip: Only Parts A (Liability), B (PIP), and C (UM/UIM) are legally required in Minnesota. Part D (Collision/Comprehensive) is optional but typically required by lenders.

Physical Damage Coverage (Optional)

Collision Coverage

What It Covers:

• Damage to your vehicle from collision with another vehicle or object
• Single-vehicle collisions (hit tree, pole, guardrail)
• Rollover accidents
• Your vehicle damage regardless of fault

Deductible:

• Typical: $250, $500, $1,000
• Higher deductible = lower premium
• Deductible applies per accident

When Required:

• Not legally required
• Lenders typically require for financed vehicles
• Protects your investment

Comprehensive Coverage (Other Than Collision)

What It Covers:

• Theft and attempted theft
• Vandalism and malicious mischief
• Fire and explosion
• Windstorm, hail, flood
• Falling objects (trees, rocks)
• Animals (hitting deer, etc.)
• Glass breakage (windshield)

Minnesota-Specific Considerations:

• Deer collisions very common (rural areas)
• Winter storms causing tree damage
• Hail damage from summer storms
• Frozen windshield damage from scraping
• Hitting potholes (covered under collision, not comprehensive)

Deductible:

• Typical: $100, $250, $500
• Usually lower than collision deductible
• Some policies waive deductible for glass-only damage

Exam Tip: Comprehensive covers everything OTHER THAN collision. Remember: Theft, vandalism, fire, weather, animals, falling objects. Collision covers impact with vehicles or objects.

Minnesota-Specific Auto Issues

Deer Collisions

Frequency:

• Minnesota has significant deer population
• Peak seasons: October-November (mating), May-June (fawns)
• Rural roads and highways at dawn/dusk highest risk

Coverage:

• Comprehensive coverage (not collision)
• No deductible applies if animal collision coverage enhanced
• Common claim in Minnesota

Winter Driving Hazards

Ice and Snow:

• Black ice on highways
• Snowstorms reducing visibility
• Frozen windshields
• Snow/ice accumulation on vehicles

Coverage Implications:

• Accidents from loss of control: Collision coverage
• Damage from falling ice/tree branches: Comprehensive
• Windshield cracks from temperature: Comprehensive

Potholes

Prevalence:

• Freeze-thaw cycles create severe potholes
• Spring is worst season
• Can cause significant vehicle damage

Coverage:

• Hitting pothole: Collision coverage
• Not covered under comprehensive
• Deductible applies

SR-22 Certificate of Financial Responsibility

What is SR-22?

SR-22 is NOT insurance—it's a certificate proving you have insurance.

Purpose:

• Proves continuous insurance coverage
• Filed by insurer with Minnesota DVS (Driver and Vehicle Services)
• Required for high-risk drivers

When SR-22 is Required

Common Situations:

• DWI/DUI conviction
• Multiple traffic violations
• At-fault accident without insurance
• License suspension for insurance lapse
• Accumulating too many points
• Reckless driving conviction

Duration:

• Typically 3 years from date of requirement
• Must maintain continuous coverage entire period
• Any lapse restarts the 3-year period
• DVS notified if coverage lapses

SR-22 Process

1. Requirement Imposed: Court or DVS orders SR-22
2. Contact Insurer: Notify insurance company
3. Insurer Files SR-22: Company files certificate with DVS (fee: typically $20-$50)
4. DVS Receives: DVS confirms and tracks compliance
5. Maintain Coverage: Keep insurance active for required period
6. Completion: After 3 years, SR-22 requirement ends

If Coverage Lapses:

• Insurer notifies DVS immediately
• License suspended
• SR-22 period restarts
• Additional penalties

Exam Tip: SR-22 is a CERTIFICATE proving insurance, NOT a type of insurance. Any lapse during the SR-22 period immediately suspends the license and restarts the 3-year clock.

Economic Loss Coverage

Basic Economic Loss (BEL)

Minnesota offers reduced PIP coverage for lower premiums:

Basic Economic Loss:

• Covers medical expenses only
• Typically $20,000 limit
• Does NOT cover non-medical expenses (lost wages, replacement services)
• Significantly lower premium
• Optional alternative to full PIP

Who Should Consider BEL:

• People with excellent health insurance
• People with disability insurance
• Lower-income drivers seeking affordable coverage

Risks of BEL:

• No coverage for lost wages
• No coverage for replacement services
• May leave gap in coverage

Exam Tip: Basic Economic Loss (BEL) is a reduced PIP option covering only medical expenses. Full PIP covers both medical ($20K) and non-medical ($20K) for total $40K. BEL reduces premiums but eliminates wage loss coverage.