Auto insurance. Minnesota.

   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.

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

• Comparison shop.
• Talk to more than one agent and insurance company.
• Increase deductibles: the higher the deductible the lower the premium.
• Ask about discounts. Find out if you are eligible for any of the discount programs offered by the company.

How to Shop for Insurance

Decide on the coverage you need and want before you shop
Although you must insure your vehicle to the minimum standards previously described, you do have some options. Before you begin shopping, decide on the policy limits you need for each kind of coverage and the deductibles you can afford. For example, if your deductible is $500 for collision coverage and you have an accident, you must pay the first $500 before your insurance company will pay for the remainder of the loss.
You may wish to purchase additional coverage rather than the minimum prescribed. Deciding on the type and amount of additional coverage you want before you talk to an agent or company will allow you to compare "apples to apples." Discounts can differ from company to company in type and amount. Make your comparison on how these discounts affect the final cost.

Call several agents
There are two types of agents: those that represent a single company (captive agents) and those that represent a number of companies (independent agents). Each will be able to provide you with a quote for insurance coverage. Make sure you know which company the agent is obtaining the quote from.