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Minnesota Car Insurance

For residents of Minnesota, auto insurance must be carried by all drivers. Since MN is a no-fault state as far as auto insurance is concerned, a person who has been injured in an accident is limited as far as suing to recover money for damages. If you are involved in an accident and are considered to be at fault, then you may be ordered to pay for medical expenses over the level of coverage the other person has for Personal Injury Protection (PIP).

Read on to learn more important details before choosing a provider for your Minnesota car insurance.

Minnesota Auto Insurance: Insurance Coverage Required By Law

All drivers in Minnesota are required to carry the following types of car insurance coverage:

  • Standard Liability Insurance - Your standard liability insurance covers you if a person is injured in an accident that is considered to be your fault. Minnesota residents are required to buy a minimum of $30,000 of liability insurance per injured person, with a limit of $60,000 for all claims for injuries arising from the same accident. $10,000 in coverage must be carried for damage caused to another person’s property. These amounts (30/60/10) are the legal minimums and it may make sense for you to buy coverage over this amount. Your insurance company or independent agent can help you to determine the level of coverage that will best fit your needs and your budget.

  • Personal Injury Protection (PIP) - Personal injury protection (PIP) coverage is designed to pay for the cost of your injuries sustained in an accident, no matter which driver is considered at fault. This “no fault” coverage also extends to anyone traveling in your vehicle with you at the time of the accident. Under Minnesota law, you will be required to carry at least $40,000 of PIP coverage.

    This amount is broken down as follows: Medical Expenses of $20,000 and Funeral and/or Lost Wages of up to $20,000.

    You are free to choose to buy more than the legislated minimum amount (and pay a higher premium). If you want to have additional coverage but keep your monthly costs down, then ask your insurance company about increasing your deductible (the amount you will have to pay before the insurance company will pay any benefits under the PIP policy). The higher your deductible, the lower your monthly premiums will be. You will need to make sure that the deductible you choose is at a level you can afford to pay if you are ever injured in an accident, though.

  • Uninsured and Underinsured Motorist Coverage (UM/UIM) - As the name implies, this type of insurance will protect you if you are injured as the result of an accident caused by a driver who is either uninsured or who does not have adequate insurance coverage. Minimum amounts for this type of coverage are 25/50. Up to $25,000 in damages will be paid to each injured person under the policy, with a maximum payable of $50,000 per incident. The Uninsured and Underinsured Motorist coverage will kick in after you have exhausted all benefits under your PIP plan.

Minnesota Car Insurance: Optional Coverage Available

Drivers in Minnesota can also choose to buy the following types of coverage:

  • Collision
  • Comprehensive

If you are interested in saving money on these types of insurance, you may want to consider raising your deductible. When you increase your deductible, your monthly premiums will decrease.

After you have driven your car for a few years, it may make sense to drop these optional types of insurance altogether, since they will only pay out up to the fair market value of your vehicle. This approach will likely only work if you are no longer making loan payments on the car, since most lenders will require you to have this type of insurance in place.

Another alternative is to raise your deductible and buy more insurance coverage for the same (or a similar) price. Agreeing to pay a bit more out of your own pocket may mean that you can get a few hundred thousand dollars more in coverage. With the cost of health care increasing with time, these types of expenses can add up quickly, and any amount not covered by your policy limits will need to be paid by you personally.

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