University of St. Thomas Law Journal

Navigating Insurance in Minnesota Personal Injury Claims

Nick Downes*

Car accidents are one of the leading causes of injury in Minnesota.1 When someone is injured in Minnesota, the path to receiving compensation for their injuries can be difficult to navigate. This path is rooted in insurance policies, and many people hire personal injury attorneys to help them with the process. Understanding the basics of common insurance coverages is crucial for both personal injury attorneys and injured persons seeking compensation for their injuries.

In this post, I will cover the basics of the primary types of automobile insurance coverages typically involved in Minnesota personal injury claims. While each type of coverage—and individual insurance policies—all have their own complexities, this blog will cover the basics of the most common insurance coverages that personal injury attorneys deal with.  

No-Fault Insurance

Many of you have probably heard the term “no-fault”, but what does it really mean? Minnesota became a no-fault state in 1975 and is one of twelve states that still follow a pure no-fault system.2 The purpose of the No-Fault Act, among others, is to ease the burden of the court system and to ensure prompt treatment for accident victims.3

Many believe—due to its title—that no-fault means nobody is at fault for a car crash. That is a misnomer. No-fault coverage, or Personal Injury Protection (“PIP”), ensures that both parties are eligible for compensation regardless of who is at-fault for the collision.4 No-fault generally covers a person suffering injuries “arising out of the maintenance or use of a motor vehicle.”5 It is often the first line of insurance in Minnesota personal injury claims involving an automobile.

Regardless of fault, PIP covers basic economic loss benefits described in Minn. Stat. § 65B.44.6 Those benefits include $20,000 for medical expenses and $20,000 for other economic losses such as wage loss, replacement services, and funeral expense loss.7 Each category under the economic loss benefits has its own requirements, further explained by Minn. Stat. § 65B.44.8

This $40,000 is the minimum coverage for no-fault in Minnesota.9 However, insurance carriers often dispute the medical necessity of an injured person’s treatment or make additional arguments to avoid paying the minimums. Additionally, factual disputes about whether someone is an “insured” or whether the collision arose out of the “maintenance or use of a motor vehicle” often arise and impact the amount of no-fault paid. Although $40,000 is the minimum, additional coverage may be purchased in individual insurance policies.10

No-fault insurance coverage is mandatory in Minnesota for all motor vehicle owners.11 If two vehicles are involved in a two-car auto-accident, the drivers of both vehicles would be eligible for basic economic loss benefits through the No-Fault Act. But who pays for no-fault?

While there are several exceptions that shift the priority of payments, the general rule is that no-fault is paid by the policy under which the injured person is an insured.12 If an injured person is not insured under any policy, the person may seek coverage from the vehicle they were occupying.13 If the injured person was not occupying a vehicle at the time of the collision, such as a pedestrian, and is not insured under any policy, the person may seek no-fault coverage from any vehicle involved in causing the injury.14 These priority of payments can sometimes be contested, especially when multiple vehicles are involved or if someone is a pedestrian.

Under the No-Fault Act, Minnesota does not define a motorcycle as a “motor vehicle,” so no-fault insurance is not mandatory for motorcycles and must be explicitly purchased to apply to motorcycles.15 This is important because those who own automobiles and motorcycles might be under the assumption that no-fault is automatically included in their motorcycle insurance policy. This is not true.

While there is a lot of complexity to no-fault insurance coverage, these are the basics, and you can now understand what “no-fault” actually means.

Liability Coverage

While no-fault insurance helps you recover for your own injuries, liability coverage is essential for protecting you when you’re at fault for a crash. In Minnesota, all drivers are required by law to carry at least $30,000 per person and $60,000 per accident in bodily injury liability coverage.16 This means that if you cause a collision that results in injuries to others, your insurance will cover their pain and suffering and economic losses up to these limits. A person may electively purchase additional liability insurance coverage through increased premiums.

Because Minnesota is a no-fault state, any potential tort claim must meet certain “tort thresholds” to be brought.17 This correlates with the purpose of the No-Fault Act in easing the court’s caseload. However, this only applies to non-economic damages such as pain and suffering or emotional distress.18 If any of the following conditions are met, a claimant has met the tort threshold: (1) death or permanent disfigurement, (2) total disability for at least 60 days, or (3) reasonable medical expenses that exceed $4,000.19 One caveat is that diagnostic procedures—like x-rays—are excluded from the medical expenses calculation for tort thresholds.20

If a tort threshold is met, a claimant can bring a tort claim against the defendant driver. This allows the claimant to access the defendant’s liability coverage, which can cover both economic and non-economic damages. If the tort threshold is not met, the injured party cannot pursue a tort claim for non-economic damages. In that case, they will be limited to their PIP, UM, and UIM coverage, if applicable. If the defendant is found to be at-fault, the defendant driver’s insurance company will be responsible for paying a portion of, or the entire amount of coverage up to the limits.

However, the minimum liability limits set by Minnesota law may not always be enough to cover the full cost of damages, especially if serious injuries are involved. This brings us to the next important type of coverage.

Underinsured Motorist Coverage

While liability coverage protects others, it doesn’t always protect you if you’re involved in a collision with a driver who doesn’t have enough insurance to cover your costs. In Minnesota, some drivers carry only the state-required minimum liability coverage, which may not be sufficient if you’re seriously injured. This is where underinsured motorist (“UIM”) coverage steps in, providing additional protection if the at-fault driver’s insurance limits fall short of covering your total damages.

UIM coverage provides an additional protection if you’re hit by a driver who has insufficient liability insurance. For example, if you’re injured in a crash and the at-fault driver only has the state minimum of $30,000 in liability coverage, but your damages exceed that amount, your UIM coverage will help make up the difference.

Minnesota is one of fourteen states that mandates Underinsured Motorist Coverage for drivers of motor vehicles.21 UIM is a claim against your own insurance company that allows you to receive compensation if the driver who injured you was an underinsured motorist.22 The mandatory minimum of UIM coverage is $25,000 per person and $50,000 per accident.23 Because the UIM claims are made against your own insurance—and not the at-fault driver’s—you do not need to meet the tort thresholds to file a claim.24 UIM coverage will pay the difference between your damages and the at-fault driver’s insurance limits up to your policy limits.25 It helps bridge the gap between the at-fault driver’s liability limits and your actual damages, including both economic and non-economic losses.

Uninsured Motorist Coverage

Not all drivers carry insurance, even though it’s required by law. If you’re involved in a collision with someone who is completely uninsured, you might be left in a difficult position if you don’t have the proper coverage.

Uninsured motorist (“UM”) coverage protects you in the event of a crash with a driver who lacks insurance.26 It also covers you in hit-and-run situations where the driver cannot be identified.27 UM coverage helps cover medical bills, lost wages, and pain and suffering if you’re injured by an uninsured driver.28 Like UIM and no-fault, UM coverage is required by Minnesota law and is a claim against your own insurance company, providing compensation for both economic and non-economic damages without the need to meet a tort threshold.29

Minnesota’s auto insurance system is complex and difficult to navigate. Together, these forms of coverage offer a comprehensive approach to automobile insurance, balancing swift compensation with accountability. Understanding the distinctions between PIP, liability, UIM, and UM coverage is essential for both policy holders and legal professionals, ensuring drivers are adequately protected while adhering to state-mandated requirements. Now, with this knowledge, you can entertain your friends—or perhaps bore them to tears!

* Nick Downes, J.D. Candidate University of St. Thomas School of Law, Class of 2026 (Associate Editor)

  1. Minnesota Department of Health, Minnesota Unintentional Injury Plan 2020, https://www.health.state.mn.us/communities/injury/pubs/documents/UnintentionalInjuryPlan2020.pdf [perma.cc/4N47-8G6D]. ↩︎
  2. Minnesota Legislative Reference Library, Report of the Minnesota Advisory Council on Unintentional Injury Prevention (1986), https://www.leg.mn.gov/docs/pre2003/other/860128.pdf [perma.cc/SN5K-XRHD]; Liberty Mutual Insurance, What Are No-Fault Insurance States?, https://www.libertymutual.com/insurance-resources/auto/what-are-no-fault-insurance-states [perma.cc/R4H9-2CKT] (last visited Nov. 28, 2023). ↩︎
  3. Minn. Stat. § 65B.42 (2024). ↩︎
  4. Id. ↩︎
  5. Minn. Stat. § 65B.43 (2024). ↩︎
  6. Minn. Stat. § 65B.44 (2024). ↩︎
  7. Id. ↩︎
  8. Id. ↩︎
  9. Id. ↩︎
  10. Minnesota Department of Commerce, Facts on No-Fault Insurance, https://mn.gov/commerce/insurance/auto/basics/#:~:text=Facts%20on%20No%2DFault%20insurance&text=If%20you%20are%20injured%20in,property%20damage%20to%20your%20vehicle [perma.cc/72YA-P7HP] (last visited Nov. 18, 2024). ↩︎
  11. Id. ↩︎
  12. Minn. Stat. § 65B.47 (2024). ↩︎
  13. Id. ↩︎
  14. Id. ↩︎
  15. Minn. Stat. § 65B.43 (2024). ↩︎
  16. Minn. Stat. § 65B.49, subd. 3 (2024). ↩︎
  17. Minn. Stat. § 65B.51, subd. 3 (2024). ↩︎
  18. Id. ↩︎
  19. Id. ↩︎
  20. Id. ↩︎
  21. Allstate Insurance, Uninsured Motorist Coverage, https://www.allstate.com/resources/car-insurance/uninsured-motorist-coverage [perma.cc/XA93-LCDA] (last visited Nov. 18, 2024). ↩︎
  22. Minn. Stat. § 65B.49 (2024). ↩︎
  23. Minn. Stat. § 65B.49, subd. 3a (2024). ↩︎
  24. Minn. Stat. § 65B.51 (2024). ↩︎
  25. Eric Beyer, Car Accident with an Uninsured Driver: Know Your Rights (Aug. 19, 2024), https://www.knowyourrights.com/blog/car-accident-with-an-uninsured-driver-know-your-rights/ [perma.cc/UD67-SYG5]. ↩︎
  26. Minn. Stat. § 65B.43, subd. 16 (2024). ↩︎
  27. Minn. Stat. § 65B.43, subd. 18 (2024). ↩︎
  28. Supra note 21. ↩︎
  29. Minn. Stat. § 65B.49 (2024). ↩︎

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