The Ultimate Minnesota Car Insurance Guide (Costs + Coverage)

Whether you are driving to the Voyageurs National Park this summer or looking to spend time in Minneapolis, you need the best auto insurance coverage for complete peace of mind.

The state also has more than 850 domestic and foreign insurance companies in the state. With so many choices, you are bound to feel overwhelmed when choosing the best insurance product.

Our guide will help you make an informed decision for the insurance product that best suit your need.

Shopping for Minnesota automobile insurance? If you reside in Minneapolis, Saint Paul, Rochester, Duluth, or Bloomington, you can easily find up to six rate quotes from top companies near you via AutoInsuranceEZ.com.

You can start comparing insurance rates by entering your zip code in our FREE tool.

Minnesota Car Insurance Coverage and Rates

The best auto insurance policy is the one tailored to your needs.

But, how to figure out if the coverage is relevant for your needs?

Answer: You should know the insurance fundamentals.

Don’t worry as cover the fundamentals in easy to understand manner.

In the guide, we will help you understand different types of coverages, required minimum requirements, add-on coverage options, rates, and much more.

After all, no one should be paying for a product that they don’t know why they need it in the first place!

– Minnesota’s Car Culture

The perception that the rest of the nation has is that Minnesotans drive with their famous ‘Minnesota nice’ attitude. You get rarely honked or see drivers swerving around you at an intersection.

However, sometimes you see excessive speeds on the freeways and dangerous driving during the brutal winter weather.

Consequently, you may see a lot of accidents, spinouts, and rollovers during winter weather.

Pick-up trucks, primarily the Ford F-150, are liked in the North Star state.

Minnesotans prefer to drive for everything.

In the city of Minneapolis, around 90 percent of trips are done using a car.

The city is preparing a 2040 Comprehensive Plan in which it wants residents to drive less for errands such as grocery shopping by bringing shops closer to homes.

But, till that happens, the residents have to drive, and therefore an adequate auto insurance coverage is vital.

– Minnesota Minimum Coverage

The next obvious question you may have is:

‘But what is adequate coverage?’

Well, it depends on how much you are driving, your track record, where you stay, and much more.

But, what is not negotiable is the minimum auto liability insurance that you must purchase.

The state requires you to carry the proof of coverage and enacted a law in 2016 that mandates that residents must prove insurance coverage while registering a vehicle in the state.

The State of Minnesota mandates that you must have the following minimum coverage:

Liability coverage

• $30,000 for injury or death of one person/ $60,000 for injury per accident
• $10,000 for property damage

Personal Injury Protection (PIP)

• $40,000 per person per accident ($20,000 for hospital and medical expenses and $20,000 for non-medical costs such as lost wages)

Underinsured and Uninsured coverage

• $25,000 for injury per person for underinsured and uninsured
• $50,000 for injury per accident for underinsured and uninsured

Minnesota is one of the only five states in the country that requires residents to purchase liability coverage, personal liability protection, and uninsured/underinsured coverage.

However, this is the minimum amount that is required by the state. In case of an accident, the cost can be much higher. It is always prudent to carry higher coverage than the state-mandated minimum.

But, what is the use of these coverages?

Let us discuss each to understand why is it required.

– Liability Insurance

Liability insurance pays for injuries and damages to the third party in case of an accident where you are at fault.

In case you rear-ended a car and held at fault, and your insurer may cover the damage to the third-party up to your coverage limit.

In case the damage is above your coverage limit, you may need to compensate the third party out of pocket. That is why it is imperative that you have adequate coverage to protect yourself against financial implications.

Watch this video from Allstate to learn more about liability insurance:

– Personal Injury Protection (PIP)

While liability covers the third party, PIP is designed to protect you and your co-passengers in case of an accident.

Since Minnesota is a no-fault state, you are required to purchase PIP coverage.

In case of an accident, PIP will cover your or other covered person’s medical bills, lost wages, child care, and funeral expenses.

The PIP system is expected to help you get back on the feet after an accident by paying for medical bills and other expenses without assessing who was at fault. It also reduces the burden at courts for small damages.

However, if you want to step out of the no-fault system to sue a third party for damages, you must meet the following conditions:

•  incurred more than $4,000 in medical expenses
• suffered more than 60 days of disability, or permanent injury

Remember: The compensation against your claim will be only the additional amount not already covered by your PIP.

Take a look at this Geico video to understand more about PIP:

– Underinsured and Uninsured Coverage

As the name suggests, uninsured/underinsured coverage is meant to pay for damages in case an uninsured/underinsured driver hits you.

Minnesota has a considerable number of uninsured drivers, and therefore, it is vital that you are adequately covered against potential loses.

– Required Forms of Financial Responsibility in Minnesota

It is mandatory to purchase the state-mandated liability coverage in Minnesota.

If you caused an accident and did not have an insurance policy, you would need to file a form SR-22 financial responsibility form.

You will also require an SR-22 form for a suspended license, or previously reported lapses of coverage.

You are expected to show proof of insurance when requested by a law enforcement officer. If you fail to show the evidence, you are to appear in court and prove you were covered.

Driving without insurance is considered a misdemeanor offense that carries a fine up to $1,000 and 90 days of jail time.

Do not make the mistake of driving without insurance!

– Premiums as Percentage of Income in Minnesota

How to get a discount?

One fundamental way is to know what are other paying in your state on average.

Knowing about the average premium paid by other Minnesotans might help you in analyzing the quote that you may receive from an insurer.

Average annual disposable income in Minnesota is $42,500, while the average premium for full coverage is $856.

On average, Minnesotans spend around $130 less than the national average. Which means more savings and more disposable income!

However, the average numbers may not apply in your case. Your premium might be impacted by your driving record, coverage type, credit score, and much more. You can use our FREE calculator to find what percentage of your income is spent on auto insurance.

CalculatorPro

– Core Car Insurance Coverage in Minnesota

According to the National Association of Insurance Commissioners, the average full coverage auto insurance in Minnesota was $826.04 against the national median of $954.99.

Besides liability insurance, full coverage auto insurance includes collision and comprehensive coverage.

Although auto insurance is cheaper than the national average, it won’t hurt to look for additional discounts!

You can do the following things to save on premiums:

• Optimize the Deductible: A higher deductible will reduce the premium
• Multiple Vehicles: Have multiple vehicles on the same policy
• Certified Driving Course: Complete a DMV certified driving course for premium discounts
• Safety Equipment: Safety equipment such as ABS and anti-theft alarm can save on discount
• Reduce your mileage: Some insurers may provide a premium discount for low annual mileage

– Additional Liability Coverage in Minnesota

Minnesota is one of the five states in the country that requires you to buy PIP and uninsured/underinsured coverage.

With more than 11.5 percent of drivers in the state are either uninsured or carry less than required insurance, it is vital to have adequate coverage in case of an accident.

Uninsured/underinsured coverage helps if an uninsured driver hits you, and they are unable to pay for damages.

But how to know if your policy would pay you:

Answer: Look at the loss ratio.

What is the loss ratio?

Loss ratio is the ratio between the total payout made by the company against the total premiums earned.

A higher than average loss ratio would mean that the company is sustaining losses and paying more than it earned. It would also indicate that the premiums might increase in the near future.

A less than average loss ratio may indicate that a company is not paying claims regularly. It may indicate that you may experience difficulty in claim processing.

– Add-ons, Endorsements, and Riders

In addition to options like collision and comprehensive insurance, there are other add-on coverages to consider in creating your insurance policy, such as:

• Guaranteed Auto Protection (GAP) 
• Personal Umbrella Policy (PUP)
• Emergency Roadside Assistance
• Mechanical Breakdown Insurance
• Rental Reimbursement
• Modified Car Insurance Coverage
• Classic Car Insurance
• Non-Owner Car Insurance
• Pay-As-You-Drive or Usage-Based Insurance 

– Premium Rates by Demographics in Minnesota

Insurers generally charge a higher premium for teen drivers due to the higher risk involved with a new driver. Some insurers also charge varying rates based on gender. However, with age insurance premiums generally, tend to reduce to a market average.

The table clearly shows why comparison buying is important if you want to save on premiums. If you are a teen male driver, you can save a whopping $24,000 in average annual premiums if they move from Liberty Mutual to State Farm.

– Cheapest Rates by Zip Code in Minnesota