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Auto Insurance Basics

Auto insurance can protect you from the financial costs of an accident or injury, but you need to have the proper coverage. Commerce is here to help you make the most of insurance from buying the right amount of coverage and in the case of an accident, settling a claim and getting you back on the road.

What you need to know:

  • Auto insurance is required by Minnesota law and if you have a car loan, your lender may also require coverage. 

  • Policies will vary beyond what is required by law and every policy will have limitations on what it covers and to what extent.

  • You policy can be cancelled if you don't pay your premium, misrepresent or fail to disclose certain information. 

The No-Fault System in Minnesota

Minnesota No-Fault Automobile Insurance Act requires Minnesota residents and nonresidents are required at all times to maintain basic economic loss benefits and automobile liability coverage (also known as Personal Injury Protection or PIP) on vehicles they own, provided use of a vehicle is contemplated and one of the following is true:

  1. The vehicle required to be registered or licensed in Minnesota, or

  2. The vehicle principally garaged in Minnesota

Secondly, the Act also required a nonresident of Minnesota to maintain PIP and liability coverage on any other owned vehicle whenever the nonresident drives this vehicle within the borders of Minnesota.

Additionally, companies listed on this No-Fault Certification Form have formally agreed to provide Minnesota no-fault benefits to their non-Minnesota insureds if those insureds are involved in an accident while driving their vehicle in Minnesota.

Facts on No-Fault insurance

  • No-fault is the Personal Injury Protection (PIP) on your policy, sometimes referred to as Basic Economic Loss Benefits.
  • If you are injured in an accident, this portion of your policy pays you and members of your household, within the stated limits, for medical expenses, lost wages, and replacement services. These costs are paid no matter who is at fault. 
  • No-Fault coverage applies only to expenses resulting from injuries sustained in an accident. It does not mean that insurance companies will cover all losses in an accident regardless of who is at fault.
  • No-fault claims are first made on your own PIP. If expenses then prove greater than the PIP limit on your policy, or you attain specified thresholds, you may make a claim against the other driver’s liability coverage if the other driver is found to be liable.
  • Minimum no-fault coverage is $40,000. That amount is available to each person injured in an accident; $20,000 is allowed for medical expenses and $20,000 may be used for non-medical expenses. Coverage beyond these minimum amounts may be purchased.   
  • No-fault usually does not apply to accidents when you are riding your motorcycle or snowmobile. You must purchase a separate insurance policy covering these vehicles, and the policies will not include personal injury protection. PIP coverage for snowmobiles or motorcycles can, however, be purchased separately.
  • No-fault claims must be made within six months of the accident.You must include proof of expenses, complete an application for benefits, and submit to a medical examination if requested. Bills should be submitted to the insurance company as they come in.
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