The Basics of No-Fault

Minnesota is one of a handful of states that follows “No-Fault” laws when a motor vehicle accident occurs. Most people hear the term No-Fault and believe it is related to how responsibility is assigned after an accident. It doesn’t actually have anything to do with who is at fault for the accident. No-Fault laws mean that after an accident happens your car insurance is required to pay for your medical bills and wage loss. This is true regardless of how the car accident happened.

Personal Injury Protection and Coverage 

If you look at your insurance policy or insurance card, you will notice that you have PIP coverage listed. This stands for Personal Injury Protection. It is the portion of your policy that insurance companies are required to provide you in Minnesota. Generally, that policy covers $20,000.00 of your medical bills, and separately, the first $20,000.00 of your wage loss or replacement services. If you have two or more cars, you can pay extra to increase the number of benefits you get by “stacking” the coverage. If you have questions on this, contact a car accident attorney at 612-injured. 

How Are Medical Bills Paid?

Medical benefits after a car accident are straightforward. Your car insurance becomes your health insurance for your medical treatment related to the claim.  This includes your mileage to and from appointments and other out of pocket expenses related to your care. If you are taken to the hospital, they will often ask you to complete a form to identify your car insurance. This is how they ensure getting paid. If you have your own health insurance they may refuse to pay for the bill if they find out your injuries were caused by a car accident. If your health insurance paid a bill your car insurance was supposed to pay, your health insurance will ask to get reimbursed.

What About Wage Loss?

Wage loss and replacement services are slightly more complicated. To get your wage loss paid you to need to show that you missed work due to your injury. Not having transportation to get to and from work does not qualify you for wage loss benefits.  Your doctor needs to give you work restrictions taking you off work, and your employer needs to provide verification that you missed time. Your benefits are limited to 85% of your average wage. Typically this is determined by averaging your paychecks for the last three months. This has a weekly cap of $500.00.  Replacement services are limited to $200.00 a week but can be used to offset expenses you incur. For instance, if you normally mow your own yard but now you have to pay the neighbor kid $20.00 to mow it for you, write them a check or get a receipt and submit it for reimbursement.

Why Does Insurance Need to be Involved?

Clients regularly ask why their insurance has to be involved, and unfortunately, the answer is that it is the law. However, there are other practical reasons as well though. If you are not at fault for the accident, when you attempt to settle with the at-fault driver’s insurance they will not include the medical bills in their evaluation. This means they’ll make you pay it out of pocket. They will give you money to pay your medical bills if you do not have No-Fault coverage. Although you tend to end up with more money in your pocket if you just let No-Fault pay the bills.

Will My Insurance Rates Go Up? 

The next question is if using your No-Fault insurance will raise your car insurance rates, and the answer is no. Your insurer cannot penalize you for using your No-Fault benefits. They will, however, raise your rates because you were involved in an accident, even if you were not at fault. Your policy will often come with a grid that explains what your rate increases will be in different scenarios. The theory is that even if you were not at fault, you drive in parts of the city, and at times of the day that make you riskier to insure. Whether you use your No-Fault benefits though, is not allowed to be used in that increase. Your rates will have already gone up by the time you finish reporting the claim to your insurer.