What types of insurance do I need?
No Fault Insurance
What is Automobile Insurance?
An auto insurance policy is a package of different coverage models. Most states require you to purchase a minimum amount of certain kinds of coverage. But if you’re interested in protecting yourself from a lawsuit or from hefty repair bills, then it makes sense to buy more than what’s required. Below are the different types available:
Liability coverage is the foundation of any auto insurance policy, and is required in most states. If you are at fault in an accident, your liability insurance will pay for the bodily injury and property damage expenses caused to others in the accident, including your legal bills. Bodily-injury coverage pays for medical bills and lost wages. Property-damage coverage pays for the repair or replacement of things you wrecked other than your own car. The other party may also decide to sue you to collect "pain and suffering" damages.
The foundation of your auto insurance puzzle is liability insurance. Forty-five states require the purchase of auto liability insurance (South Carolina and Virginia require that you register as an uninsured motorist if you do not have liability insurance; Tennessee requires proof of financial responsibility; New Hampshire and Wisconsin don’t mandate liability coverage except in certain cases). Your insurance minimum will depend on where you live. For example, in Texas, drivers have to purchase at least $20,000 worth of bodily injury coverage per person, $40,000 worth of bodily injury coverage per accident, and $15,000 worth of property damage coverage (also known as 20/40/15).
Minnesota car insurance laws
All Minnesota drivers are required to carry three types of auto insurance: standard liability, uninsured and underinsured motorist bodily injury coverage, and personal injury protection (PIP).
Minnesota is a no fault state, and PIP is the no fault part of auto insurance policy. In the event of an accident, PIP helps pay the cost of your injury-related expenses, as well as those of your passengers’, regardless of who was at fault for the accident.
Minnesota auto insurance laws require $40,000 worth of PIP coverage, ($20,000 for medical costs, and $20,000 for other related expenses, like lost wages or funeral costs). Drivers may choose to purchase higher levels of PIP for an increase in premium, or apply a deductible to the policy for a premium reduction.
No fault insurance does limit the right of an injured party to sue for damages caused by an auto accident. However, at-fault drivers can be found liable for expenses over the limit of the injured party’s PIP coverage. Liability insurance helps cover these costs, and it is required by Minnesota auto insurance laws.
Minnesota’s liability insurance minimums are 30/60/10. (That’s $30,000 per person for injuries you cause to the other party, up to $60,000 for all, and $10,000 for damage you cause to the other party’s property.)
The final coverages required by Minnesota auto insurance laws are uninsured and underinsured motorist bodily injury coverage in the amount of 25/50 ($25,000 for injuries per person, up to $50,000 total). These policies help pay for your medical expenses should you be injured by a driver with inadequate liability insurance. They apply only after your PIP benefits have been exhausted.
Collision and comprehensive coverage
If you cause an accident, collision coverage will pay to repair your vehicle. You usually can’t collect any more than the actual cash value of your car, which is not the same as the car’s replacement cost. Collision coverage is normally the most expensive component of auto insurance. By choosing a higher deductible, say $500 or $1,000, you can keep your premium costs down. However, keep in mind that you must pay the amount of your deductible before the insurance company kicks in any money after an accident.
Insurance companies often will "total" your car if the repair costs exceed a certain percentage of the car’s worth. The critical damage point varies from company to company, from 55 percent to 90 percent.
Comprehensive coverage will pay for damages to your car that weren’t caused by an auto accident: Damages from theft, fire, vandalism, natural disasters, or hitting a deer all qualify. Comprehensive coverage also comes with a deductible and your insurer will only pay as much as the car was worth when it was wrecked.
Because insurance companies normally will not pay you more than your car’s book value, it’s helpful if you have a rough idea of this amount. Check the Kelley Blue Book or the National Automobile Dealers Association. If your car is worth less than what you’re paying for the coverage, you’re better off not having it.
Medical payments, PIP, and no-fault coverages
Medical payments (Med Pay) coverage will pay for your medical expenses as well as the medical expenses of your passengers after an accident. These expenses can arise from accidents while you’re driving your car, someone else’s car (with their permission), and injuries you or your family members incur when you are pedestrians. The coverage will pay regardless of who is at fault, but if someone else is liable, your insurer may seek to recoup the expenses from him or her.
Personal injury protection (PIP) and broader "no-fault" coverages are expanded forms of medical payments protection that may be required in your state. Some states have optional PIP or no-fault coverage. Expanded features include payments for lost wages and childcare.
If you have a good health insurance plan, there might be little need to buy more than the minimum required PIP or Med Pay coverages. And, if you already have disability insurance, there is little reason to purchase higher-than-minimum amounts of PIP.
Uninsured/Underinsured motorist coverage’s
Uninsured motorist (UM) coverage pays for your injuries if a hit-and-run driver or someone who doesn’t have auto insurance strikes you. It is required in many states.
Underinsured motorist (UIM) coverage will pay out if the driver who hit you causes more damage than his or her liability coverage can cover. In some states, UM or UIM coverage will also pay for property damages.
You’ll probably want to have at least the minimal amount of UM/UIM because if you can’t find the other driver, you’ll at least have some coverage for pain-and-suffering damages.
What is Health Insurance?
What is Life Insurance?
What is Home Insurance?
What is No-Fault?
Minnesota No-Fault Claim
No-Fault Insurance pays for most out-of-pocket losses, such as medical and chiropractic bills, lost wages and many other types of out-of-pocket loss. It doesn’t matter who caused the accident. People with serious injuries may also recover from a negligent driver for their other losses, such as pain, suffering, disability, embarrassment, and other losses. Because the No-Fault Law is complicated, this pamphlet can only provide a brief summary. ALWAYS talk to an attorney if you or a family member is hurt in an accident.
Who is required to Have Minnesota No-Fault Automobile Insurance?
All Minnesota motor vehicle owners must have No-Fault insurance except motorcycles, which only need liability coverage. You will need to have proof of insurance to obtain or renew your license plates. It is a misdemeanor criminal offense if you drive or let anyone else drive your vehicle without insurance.
What Coverages are required by insurers?
What is boat insurance?
What is motorcycle insurance?
What is umbrella insurance?
Umbrella Insurance is additional liability coverage that goes "over" your auto liability limits. An umbrella policy may also increases other coverages, like homeowner’s liability or boat liability. Carrying an umbrella policy is a good idea for drivers with considerable assets to protect.
Why should I consider Personal Umbrella insurance?