Minnesota is one of 12 remaining states that uses a no-fault insurance system. Though the no-fault system goes against traditional English common law, which places financial liability on the at-fault party, lawmakers developed it out of necessity. Per The Minnesota Department of Commerce, a no-fault system is designed to reduce the burden of courts to ensure that accident victims receive prompt and fair payment for their damages. Unlike in a fault-based system, a no-fault system ensures everyone is accountable for themselves, and not for others. 

The Minnesota no-fault system requires drivers to purchase four types of coverage: Liability, personal injury protection, underinsured motorist coverage and uninsured motorist coverage. Liability covers the cost of claims arising from another driver. PIP is the portion of your policy that pays for your or another household member’s medical expenses, lost wages and replacement services. PIP is the premise of no-fault coverage, and you will receive payment regardless of whether or not you were at fault for the accident. 

Underinsured motorist coverage helps to cover expenses that exceed your PIP coverage. It kicks in when the at-fault driver does not have enough liability insurance to help you pay for the remainder of your medical expenses. Uninsured motorist coverage applies when you have exhausted your PIP coverage and when the at-fault driver is uninsured. 

Minnesota adheres to a modified no-fault system, meaning that the system is not entirely no-fault. If the expenses resulting from your accident exceed your PIP policy’s limit, you may file a claim against the at-fault driver’s liability insurance. However, you must always make a claim against your own policy first, and you must do so within six months of the accident. 

It is important to note that no-fault coverage does not kick in when you sustain injuries in a motorcycle or snowmobile accident. If you wish to ride either of these vehicles, you must purchase separate insurance policies that cover these vehicles.