The national Personal Auto Policy guide covers the ISO policy. Minnesota layers a no-fault system on top of it. That system is the Minnesota No-Fault Automobile Insurance Act, in Minn. Stat. chapter 65B. Every owner must carry a "plan of reparation security" with basic economic loss benefits (PIP), residual liability, and uninsured and underinsured motorist coverage. This guide covers the Minnesota rules.

Purpose and required coverage (65B.42, 65B.48, 65B.49)

• The Act's purposes:
  • Relieve accident victims' economic distress by paying basic economic loss benefits promptly and regardless of fault.
  • Limit general damages to serious injuries.
• Every owner of a vehicle registered or principally garaged in Minnesota must keep a plan of reparation security that provides PIP and residual liability. Self-insurance needs the Commissioner's approval.
• Collision and comprehensive are optional.

PIP benefit details (65B.44)

• People 65 or older, or 60 and retired on a pension, get income loss coverage unless they reject it. If they reject it, their rate must be reduced.
• Motorcycles: owners need liability security, but a motorcycle policy need not include PIP. An auto policy's PIP doesn't extend to motorcycle accidents. Required UM and UIM don't apply while the insured occupies his or her own motorcycle.

Who pays and when (65B.47, 65B.54, 65B.55, 65B.61)

• Generally, PIP comes from the policy under which the injured person is an insured, regardless of which vehicle the person was in.
• An employee in an employer-furnished vehicle claims under that vehicle's coverage first.
• PIP limits for two or more vehicles can't be stacked unless the policyholder specifically elects it. UM and UIM limits can never be added together for one accident.
• For UM and UIM, the occupied vehicle's limit applies first. The injured person's own policy is excess only to the extent its limit is higher.
• PIP is paid monthly as loss accrues. It's overdue if unpaid 30 days after reasonable proof, and then it bears 15% interest.
• A plan may require notice of loss within at least 6 months. Late notice bars benefits only to the extent the insurer is prejudiced.
• PIP is primary to other benefits except workers' compensation.
• Arbitration: claims of $10,000 or less for no-fault benefits or comprehensive or collision coverage go to binding arbitration (65B.525).
• Assigned claims plan: pays PIP when no applicable security can be identified. An owner who failed to carry required security can't use it, and neither can household family members (65B.64).

Tort threshold (65B.51) and comparative fault (604.01)

• You can sue for noneconomic detriment (pain and suffering) only if:
  • medical expenses exceed $4,000, or
  • the injury causes permanent disfigurement, permanent injury, death, or disability of 60 days or more (unable to do substantially all usual daily activities)
• A court deducts PIP benefits paid or payable before applying comparative fault.
• Comparative fault: a plaintiff recovers only if his or her fault is not greater than the defendant's. Damages are reduced in proportion. For example, a plaintiff 30% at fault recovers $70,000 of $100,000. The last clear chance doctrine is abolished.

Other coverage rules

• Rental cars: the property damage liability coverage of a policy insuring a person must cover damage to a rented private passenger vehicle, regardless of fault, with at least $35,000 available. Loss of use is limited to 14 days (65B.49, subd. 5a).
• Time to sue: generally 6 years, but 4 years for underinsured motorist claims (65B.49, subd. 10).
• Anti-theft discount: at least 5% off comprehensive for an approved anti-theft device (65B.285).
• Proof of insurance: insurers issue an insurance identification card for each vehicle at issue and renewal. It may be electronic with consent (65B.482). Proof can be the ID card, a written statement from a licensed agent, or the policy (169.791). Minnesota's statutes don't use the term "SR-22."

Claims handling for auto physical damage (72A.201, subd. 6)

• The insurer must tell the insured of the right to choose a repair shop and may not require a particular shop. The same applies to glass vendors and rental companies.
• Inspection is due within 5 business days if the car can't be safely driven, otherwise within 15 days.
• Total loss: the insurer offers a comparable vehicle, or cash including taxes, license and transfer fees.
• Subrogation demands include the insured's deductible, and recoveries are shared at least proportionately.

Underwriting, cancellation and nonrenewal

• Midterm cancellation is limited to statutory reasons stated in the policy (65B.15):
  • nonpayment
  • material misrepresentation
  • fraudulent claims
  • license suspension or revocation of the named insured or a regular driver within 36 months for a moving violation or test refusal
• Notice of cancellation: at least 30 days, stating the specific reason. It's at least 10 days for nonpayment or in the policy's first 60 days (65B.16).
• Nonrenewal: at least 60 days' notice stating the specific reason. Nonrenewal solely for age or for arbitrary reasons is barred (65B.17).
• Objections: notices tell the insured of the right to complain to the Commissioner within 30 days and of possible coverage through the Minnesota Automobile Insurance Plan (65B.19). The Commissioner decides within 23 days, and the decision is binding pending court review (65B.21).
• An insurer acting on reports of unsafe driving must disclose who supplied the information.
• A policy shorter than 6 months is treated as written for successive 6-month periods (65B.14).
• Underwriting limits (72A.20, subd. 23): an insurer may not use:
  • employment status
  • prior PIP claims where the applicant was 50% or less at fault
  • lack of prior insurance, unless coverage was legally required
• The owner may cancel at any time. Unearned premium (if more than one month) is refunded within 30 days (72A.20, subd. 17).

Minnesota Automobile Insurance Plan (65B.01–65B.02)

• Every insurer writing auto liability or physical damage in Minnesota must belong.
• A qualified applicant is a Minnesota resident who owns a registered vehicle, holds a license, or must file a certificate of insurance, and who has no unpaid auto premium.

Common exam traps

• Minimums: 30/60/10 liability, 25/50 UM and 25/50 UIM, $40,000 PIP ($20,000 medical + $20,000 other).
• Income loss: 85%, up to $500/week. Replacement services: $200/week after a 7-day wait. Funeral: $5,000.
• Tort threshold: $4,000 medical, or permanent injury, death or 60 days of disability.
• A plaintiff can recover only if his or her fault is not greater than the defendant's.
• Cancellation: 10 days (nonpayment or first 60 days) or 30 days. Nonrenewal: 60 days.
• PIP overdue after 30 days, then 15% interest. Claims of $10,000 or less go to binding arbitration.