Who Pays the Bills? Minnesota No-Fault Automobile Insurance Priority

“I was injured in a motor vehicle accident. Which insurance company pays my medical bills?”

This is a question that many Minnesotans ask after being injured in an accident. In short, Minnesota’s No-Fault Act requires that the first $20,000 of medical bills related to auto accidents be paid by a motor vehicle insurance company, but really, the long answer is not so straightforward. 

Minnesta’s No-Fault insurance was enacted in 1975, in part, to disconnect compensation for medical costs related to motor vehicle accidents from claims made against the “at-fault” party. The second part of it was to, in theory, reduce the amount of time that ittakes to pay claims for medical bills related to injuries suffered in motor vehicle accidents. In other words, getting medical bills paid was costly, time-consuming, and could require a formal lawsuit. This system aimed to simplify the process, yet there is still quite a bit of confusion about how it operates nearly 50 years later.

No-Fault insurance coverage is mandatory, and any automobile insurance policy written in the State of Minnesota is required to include coverage of $20,000 for medical costs and $20,000 for “economic loss” benefits. Economic loss can consist of wage loss and costs associated with maintaining a household if disabled due to injury.

With that, the question still remains: who pays?

The answer is that there is a priority system that determines which insurance company pays No-Fault benefits if a person is injured in an accident. The priority system ensures that most Minnesotans will be covered under most circumstances.

If You Own and Insure a Vehicle:

1. If the injured person owns and insures a vehicle, then that injured person’s auto insurance pays the bills. This is true even if you are in someone else’s vehicle at the time of the accident.

If You Do Not Own or Insure a Vehicle:

1. If you don’t own or insure a vehicle, but you share a residence with a relative who does, (father, sibling, grandparents, etc…) then the auto insurance that covers that relative’s vehicle covers YOU.

2. If you don’t own a vehicle and do not live with a relative, then the insurance company of the vehicle you were in at the time of the accident covers the first $20,000 of your medical bills.

3. If you were injured in an uninsured vehicle and are not covered by any of the above, then you may receive coverage through the Minnesota Assigned Claims Bureau. The Bureau may assign you coverage if you meet certain conditions. 

4. If you own a vehicle but do not insure it, then you may not qualify for any benefits under the No-Fault Act. 

As you can see, the answer to our question, like many legal questions, is rarely obvious. Of course, there many scenarios in which the process can become even more complicated like if the other party involved is un/under-insured, or if the at-fault person passes away, so please feel free to contact our office for more information or a free consultation. Be safe out there!