Your auto policy includes a number of different coverages. In this article we will look at those that are required by law in Minnesota:
Bodily Injury Liability:
If you are in an accident where you or a driver insured on your policy is at fault, this coverage will pay for injuries to others that you are responsible for. Those injured could be passengers in another vehicle, passengers in your car, or pedestrians. It will also pay the legal costs required to defend you for these claims.
Minnesota requires that your limits for this coverage are at least $30,000 per person and $60,000 per accident. Most people have higher limits than this minimum, such as $100,000 per person and $300,000 per accident, or $250,000 per person & $500,000 per accident. The limit that you choose is up to you as the insurance buyer. It may be a good idea to increase these limits with an umbrella policy that will pay for claims above what is covered by your auto or homeowners insurance.
Property Damage Liability:
This pays to repair or replace another people's property that you or someone insured on your policy damages in an accident. Usually this would be another car, but it could also be any property you cause damage to, like a building. Minnesota law requires that you purchase at least a $10,000 limit for this coverage, but most drivers have a higher limit, with $100,000 being a typical choice. Like the coverage above, you may want to consider an umbrella policy to increase this coverage limit.
Some policies will combine the bodily injury and property damage liability coverage in a combined single limit, like $300,000 or $500,000.
Personal Injury Protection (PIP):
If you are injured in an accident, this coverage will pay your initial medical expenses up to the coverage limit. It will also pay some other non-medical benefits, like lost wages. Minnesota law requires a limit of $20,000 for medical payments and $20,000 for non-medical. This coverage is paid regardless of who is at fault in the accident, so it is sometimes called "no-fault" coverage.
Underinsured Motorist Coverage:
This coverage will pay for injuries for you and those covered by your policy when the other driver is at fault. These benefits are paid up to your policy limit if the other driver has limits that are lower than yours. This coverage is mandatory in Minnesota.
Uninsured Motorist Coverage:
This is like underinsured motorist coverage, but will pay for injuries up to your policy limit if the responsible driver is not insured.
In the next part of this article, we will look at the optional coverage for your car.