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Auto Insurance

Auto Insurance Information

Click here for an Auto Insurance Coverage and Cost Comparison Worksheet

What is Auto Insurance?
Auto Insurance can protect you from the financial costs of an accident or injury, but you need to have the proper coverage. Unfortunately, many people are unclear about what their insurance policy covers until it is too late. They may have difficulties settling a claim or face rate increases or termination of coverage.

Auto Insurance Is...
Protection. Insurance is a way of transferring risk for a loss among a certain group of people. You, and others, pay premiums to an insurance company to be reimbursed if you have an accident. The amount you can collect and under what circumstances are outlined in your policy.

Required. Under most circumstances, a licensed vehicle in the state of Minnesota must have liability, personal injury protection, uninsured motorist, and underinsured motorist coverage.  Your lender may also require coverage.  

Varied. The State of Minnesota has established minimum policy requirements. Many people, however, choose options that exceed these minimum requirements.  Every policy will have limitations on what it covers and to what extent.

Auto Insurance Is Not...
A savings account. The premium you pay is not deposited into an “account” for you to withdraw in the event of an accident. If it were, it would probably not be enough to cover the cost of a major claim.

Complete. Every policy has limitations on what it covers and to what extent. You may not be fully covered in every situation. Your policy will explain the limitations.  We will help you understand your coverage options.

Guaranteed. An insurance company may elect to cancel your coverage or not to renew your policy, depending on your driving record or other factors. Minnesota law establishes the standards for these cases. 

Why do you need auto insurance?
It's really all about protecting yourself financially.

  • If you're in an accident or your car is stolen, it costs money, often a lot of money, to fix or replace it.

  • If you or any passengers are injured in an accident, medical costs can be extremely expensive.

  • If you or your car is responsible for damage or injury to others, you may be sued for much more than you're worth.

  • Not only is having car insurance a prudent financial decision, Minnesota requires you to have at least some coverage.

Who Is Covered? 
You are covered by the policy in your name. Any relative living in your home, who does not have a policy of his or her own, is covered by YOUR policy. This includes a spouse, children, or a minor in your custody or the custody of a relative. A driver using your car with your permission, who is not covered by another policy, will be covered by your policy.

What Are the Types of Coverage?
Personal Injury Protection (PIP) provides 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. This is what is known as “NO FAULT” coverage.

Liability covers claims to your policy from another driver. It is also the portion of your policy that covers damages to another’s vehicle, within the stated limits, when an accident is your fault.

Underinsured coverage pays, within stated limits, only for medical claims of those covered by your policy. These benefits are in addition to your PIP benefits and are used when the other driver is held responsible for the accident and does not have enough liability coverage to cover your medical claims.

Uninsured pays for your medical expenses after you have exhausted your PIP benefits and when the other driver is held responsible for the accident but is not covered by insurance. The above types of coverage are required; the following are optional: Collision covers damage to your auto when you are involved in an accident with another vehicle or object. Comprehensive covers a loss that is NOT the result of a collision. This usually includes fire, theft, falling objects, or an accident involving a deer. 

The above types of coverage are required; the following are optional:

Collision covers damage to your auto when you are involved in an accident with another vehicle or object.

Comprehensive covers a loss that is NOT the result of a collision. This usually includes fire, theft, falling objects, or an accident involving a deer.

Required coverage applies when you and others covered by your policy are in an accident:

You collect on your PIP benefits, regardless of whether you or the other driver is at fault. This is the no-fault portion of your policy.

If the other driver is at fault, you make a claim against his or her LIABILITY when your PIP benefits run out. You also can make a claim for damage to your vehicle.

If the other driver’s liability is insufficient, you collect on your UNDERINSURED benefits for PIP coverage. If the other driver has no insurance, you collect on your UNINSURED benefits for PIP coverage.

Optional coverage applies in cases of damage to your vehicle:

As noted above, if the other driver is at fault you may make a claim against that driver’s liability coverage. If you are at fault, damage to your vehicle as a result of an accident with another vehicle or object is covered under the COLLISION portion of your policy.

If your vehicle is stolen or damaged by vandalism, fire, or impact with a deer, you are covered under the COMPREHENSIVE portion of your policy. 

What about coverage of rental cars?
Minnesota law requires every automobile insurance policy, under the property damage liability portion, to provide a minimum of $35,000 in coverage, without a deductible, for damage to, and loss of use of, a rental car (including pickup trucks and vans under 26,000 pounds). State law further specifies that when a driver rents a vehicle in Minnesota, a separate notice must be attached to the rental contract that informs the driver of this coverage. The notice must also state: “purchase of any collision damage waiver or similar insurance affected in this rental contract is not necessary if your policy was issued in Minnesota.” The same law requires that no collision damage waiver or other insurance affecting the rented vehicle can be sold unless the person renting the vehicle acknowledges in writing that the consumer protection notice has been read and understood.

What about coverage when you loan your car to a friend?
What if you loan your car to a friend, and he or she has an accident? If any of your friends who are driving your automobile have an automobile insurance policy, their injuries will be covered under their own policy, not yours. If they are not covered under their own policy, and no one in their household is covered under a policy, the basic economic loss benefits will be paid from your policy.

Who pays for damage to the car, however, is not quite so simple. Your car will always be covered under your own policy ("your covered auto") as long as the policy carries comprehensive and collision coverage. Under certain circumstances, however, the policy covering the other vehicle may pay for damage to your car.   We also encourage looking into an UMBRELLA policy, or extra liability insurance, to help protect you from major claims and lawsuits.

Click here to read more about how an umbrella policy provides additional liability protection where your car insurance may leave off. 

What Is No-Fault Coverage?
No-Fault coverage is widely misunderstood. Many drivers believe that their insurance company will cover ALL losses in an accident, regardless of who is at fault. But “no-fault” coverage applies ONLY to expenses resulting from injuries sustained in an accident. Here are some other facts about no-fault:

  • No-fault is a Minnesota law. It was established to help ease the burden of courts and to ensure prompt treatment for accident victims.

  • No-fault IS the Personal Injury Protection (PIP) on your policy, sometimes referred to as Basic Economic Loss Benefits.

  • No-fault covers your medical costs, wage loss, replacement services such as housekeeping, and in the event of death, $2,000 of funeral expenses.

  • 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.

Minimum Coverage Requirements
Minnesota requires all licensed vehicles to have PIP, Liability, Uninsured, and Underinsured coverage in the following minimum coverage amounts:

Personal Injury Protection (PIP): $40,000 per person per accident, ($20,000 for hospital/medical expenses, and $20,000 for non-medical expenses such as lost wages, replacement services, etc.)

Liability: $30,000 for injuries to one person, $60,000 for injuries to two or more people, $10,000 for physical damage to the other driver’s vehicle or for damage to property

Uninsured: $25,000 for injuries to one person, $50,000 for injuries to two or more people

Underinsured: $25,000 for injuries to one person, $50,000 for injuries to two or more people

If you have a loan on your vehicle, the lienholder, as the legal owner of the car, will require you to carry comprehensive and collision coverage. If you do not purchase this coverage, the lien holder may buy it and charge you for the premium. This is termed “forced insurance;” it is extremely expensive, it is legal, and it does not include the required coverages listed above. 

We stronly encourage you to consider insuring yourself with higher coverage limits to protect your assets and your future.  In addition to your auto insurance, consider purchasing an UMBRELLA policy, or extra liability insurance, to help protect you from major claims and lawsuits.  

What Affects Policy Cost?
A number of factors affect the insurance premiums you pay. Different insurance companies may determine rates in different ways, but here are some of the items that affect the cost of the policy.

Added coverage. In addition to required coverage and optional collision and comprehensive coverage, you may choose additional coverage that will increase the cost of the policy. Full glass replacement, towing, and providing for rental car use when your car is unavailable are examples of optional coverage. 

Age and gender. Insurance industry statistics show that certain groups of people have different accident rates, based on their age and gender. For example, teenagers and seniors have more accidents. Because they are viewed as an increased risk for the insurance company, they pay more for coverage.

Type of vehicle. Certain vehicles cost more to repair or replace. An insurance company charges more for physical damage coverage on one of these vehicles.

Mileage. The more you drive, the more opportunity for an accident—and the more you pay for coverage.

Driving record. You will be rated according to traffic accidents and tickets you have over a period of years. The more incidents, the greater the premium. You may also be turned down for coverage if you have too many.

Where you live. If you live in an area with more traffic (a city versus a rural area), industry statistic show that you have a greater chance for an accident and therefore will pay more for coverage.

Deductibles. Some coverages in your policy have a deductible, which is the amount you pay first, before your insurance company pays, on a covered loss. The higher the deductible, the lower your premium. Insurance companies offer varying deductible amounts.

Discounts. Your premium may be reduced by various discounts offered by some companies in some instances. For example, some companies may offer a discount if you have your homeowner’s insurance with them or if you are a non-smoker. Other discounts are required by law: policyholders age 55 and over who have successfully completed a defensive driving course receive a 10 percent discount; a vehicle equipped with an authorized anti-theft protection device receives a 5 percent deduction on comprehensive coverage.

Surcharges. If you have one or more traffic violations or accidents, your insurance company may attach an additional charge to your policy. What triggers the surcharge and how much it will be vary from company to company. The Surcharge Disclosure Sheet, which by law must be given to you at the time you apply for your policy, will have the details.

Ways to reduce auto insurance costs

  • Look at all your options and understand your real insurance needs so you are paying for the policy that fits you best.

  • Comparison shop.  Let us get mutliple quotes with the many companies we represent.

  • Increase deductibles: the higher the deductible the lower the premium.

  • Apply discounts.  We are able to apply various discounts offered by the companies we work with, such as defensive driver, good student, professional association, package policies (see below) and many more.  


Can I insure my auto with my home policy?
Yes....and there is usually a discount for insuring both!  We offer multi-line policies as well as package policies.  A package policy is often beneficial since you'll have the same, and often more, coverages for your vehicles than you'll find on a stand-alone auto policy. Since we insure all of your personal valuables on one policy, you pay only one premium on a package policy.

Some of our package policies also provide coverage for motorcycles, antique/classic cars, motor homes, and trailers on the auto portion of your policy.  They also offer 24-hour emergency roadside assistance for additional coverage to protect you and your loved ones while you're on the road.


Questions to ask when looking for insurance
As independent agents, we are advocates for finding auto insurance that meets your specific needs. Here are a few things to consider as you prepare for the discussion:

  • How much can you afford to pay if you get in an accident? (To keep premiums low you may want to have a higher deductible and be willing to pay more for repairs.)

  • What is the insurance company's level of service and ability to pay claims?

  • What discounts are available? (Ask about good driver, multiple policy and student discounts.)

  • What's the procedure for filing and settling a claim? (Ask who to call and what happens after you file a claim.)

  • Do you offer an emergency roadside assistance program?

  • Do I have complete coverage for repair or replacement of all damaged safety glass without regard to any deductabke or minimum amount (oftne referred to as full glass coverage)? 

  • Should I carry umbrella insurance?  (The answer should almost always be 'yes'.)

  • Will you review my information on a regular basis?


Do you know these facts about car insurance in Minnesota?

  • The car in the rear in an accident is not automatically at fault.

  • Independent witnesses are the best resource to determine liability.

  • If you need to rent a car following an accident that is not your fault, check with the liable driver's insurance to determine the amount of rental car coverage.

  • Minnesota state law does not require comprehensive or collision coverage, but your lien holder will.

  • If your vehicle is totaled, your policy will not cover the cost of renting a comparable vehicle unless you purchase a policy with that specific coverage.

  • Your Minnesota policy provides coverage outside the state— anywhere in the United States, US possessions, or Canada— but not in Mexico. Some companies, however, sell endorsements to your policy to cover your car in Mexico.

  • There is no “grace period” for continuing your policy beyond the premium due date.

  • If you cannot mail your premium on time, personally hand deliver it to your agent’s office and get a receipt. The date your agent is paid is considered to be the date the insurer is paid. • Your agent is not required to call you to remind you that your premium is due.

  • An insurance company has 30 business days in which to accept, deny, or give a reason why it cannot accept a claim.

  • With three exceptions, an insurance company can cancel your policy for any reason within the first 59 days. The exceptions are your employment status, status as a renter, and your not previously having had a policy (unless you were legally required to have one). A company must, however, always give you the reason it is canceling your policy

Contact us today for more information, or to help you get auto quote comparisons for several companies with just one call!  Experience the value of YOUR local independent insurance agency, conveniently located in Lake Elmo near the border of Woodbury and Oakdale.  

This information is brought to you with the assistance of the 
Minnesota Commerce Department.

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