Motor Vehicle Accidents: Your No-Fault Claim

As far as auto accidents go, many people know that Minnesota is a  “no-fault”  state.  But what does that mean, exactly?  Under Minnesota law, all motor vehicle owners are required to maintain no-fault insurance, in addition to liability insurance, on their vehicle(s)—this excludes motorcycles, which only require liability insurance. A no-fault insurance policy provides for “basic economic loss benefits.”  The standard no-fault insurance coverage required by Minnesota law includes $20,000.00 for medical expenses loss (including mileage to and from related appointments) and $20,000.00 for income loss (paid at 85% of loss, up to a maximum of $250.00 per week), replacement services loss, funeral expense loss, survivor’s economic loss, and survivor’s replacement services loss. These benefits are also known as PIP (personal injury protection) benefits.

A claim for no-fault benefits arises when a person sustains an injury arising from the maintenance or use of a motor vehicle. Again, motorcycles are not included for purposes of claiming no-fault benefits, but a person may add no-fault benefits to their policy to include coverage for injuries arising out of the operation of a motorcycle. If a pedestrian is struck by a motor vehicle or motorcycle they’re eligible for no-fault benefits. Whether or not an injury arises out of the maintenance or use of a motor vehicle depends upon the facts of the accident giving rise to the injury. A no-fault claim is separate and distinct from a liability claim against an at-fault party.

A no-fault claim is typically submitted to the injured person’s own motor vehicle insurance company. There are, however, certain facts that may require the no-fault claim to be submitted to another involved party’s insurance company. To initiate a no-fault claim, the injured person must complete an Application for Benefits and submit it to the appropriate insurance company.

Once a no-fault claim has been submitted, “basic economic loss benefits” are available, but only if they are “reasonable, necessary and related to the accident.” The insurance company may or may not pay your “basic economic loss benefits;” this depends on the insurance company’s determination as to whether your losses are, in fact, “reasonable, necessary and related to the accident.” Even if you receive “basic economic loss benefits” from the insurance company initially, or for a period of time, the insurance company has the right to discontinue your benefits if it deems discontinuation warranted.

The insurance company may request that the injured party attend an independent medical examination (an examination by a medical professional hired by the insurance company) and may, based upon the report of the medical professional, discontinue payment of no-fault benefits. If an injured person’s no-fault benefits are discontinued, the injured person has a right to file a petition for no-fault arbitration, seeking reimbursement of any outstanding basic economic losses such as medical bills and income loss.

A no-fault claim must be filed with the appropriate insurance company within six (6) months of the date of accident. However, a late application for no-fault benefits must be considered by the insurance company unless it can show that it was actually prejudiced by the delay in the application. Additionally, the insurance company may terminate payment of no-fault benefits if there is a lapse of over one (1) year in the injured person’s treatment. Thus, following an injury in an accident, an injured person should seek medical attention, follow his or her provider’s care directives, and contact an attorney.

Attorney Laura Jo Busian