In almost every circumstance, drivers with Minnesota auto insurance must carry liability, personal injury protection, uninsured motorist and underinsured motorist coverage as part of their auto insurance policy, according to the Minnesota Department of Commerce.
Every state except for New Hampshire requires liability coverage but the amount varies significantly by state. Minnesota is one of only a handful of states that has a no-fault auto insurance system.
No-fault means that each drivers’ own insurance company pays for medical bills after a crash no matter who is at fault. The system has been in place since 1975 and some lawmakers feel that it is time to make a change.
No-fault insurance was created to ease the burden of courts by limiting lawsuits and speed up the rate of treatment for accident victims, according to the state. This type of policy covers a person’s medical costs, wage losses, replacement services and funeral expenses.
“Over time, with the increase in healthcare costs and with the inability to keep out enough litigation, costs have risen to the point where reform is being seriously considered in Minnesota,” David Snyder, vice president and associate general counsel for the American Insurance Association, told Minnesota Public Radio.
The minimum amount of no-fault coverage that Minnesota drivers must have is $40,000, according to the state. Of that amount, $20,000 is available for medical expenses and the remaining $20,000 can be used for non-medical expenses.
Minnesota car insurance quotes tend to be higher than other states due to the amount of coverage that is required, but the amount of fines a person would be required to pay if they are caught without it is much higher, the news outlet reports.
Experts believe that changing the current insurance mandates will only shift the cost burden onto others. If auto insurance companies no longer have to be responsible for medical bills, those costs would be more likely to fall on the health insurance industry, MPR reports.
“So it’s kind of like squeezing the balloon. If you stop paying for [medical bills] through the no-fault system, those bills go somewhere,” Jim Carey, president of the Minnesota Association for Justice, told the news source.