Handling the Insurance Needs of Minnesota and Iowa

Minnesota No-Fault Car Insurance and Iowa Tort Insurance Explained

Minnesota No-Fault Insurance

The state of Minnesota is a “no-fault” insurance state and requires every driver to carry auto insurance which covers: liability (bodily injury and property damage), personal injury, uninsured / under insured motorist.*  Many Minnesota drivers also get full coverage with comprehensive and collision (often required by auto loan lenders).  Pilot Insurance consults and works with you to get the right car insurance for your entire family.  We take into consideration your good driving record, multiple drivers in a household, safety features of your car(s), and other factors to get you the best coverage.

Automobile Insurance – Protection from financial loss in case of a car accident

Car insurance is in essence a contact that is between you and your insurance company.  In exchange for paying the insurance premiums, the insurance company agrees to pay losses that are defined by the policy.  Instead of you being liable financially and risk losing your house, property, and savings, the insurance company pays for personal injury and property damage (within the limits of your policy coverage).

Car insurance covers liability, medical, and property

Liability coverage includes both bodily injury and property damage to the other party involved in the car accident.  The liability portion of your auto insurance pays for whatever your legal responsibility is to others. (Uninsured and underinsured coverage covers you when the other driver does not have sufficient insurance to cover their liability to you.)

Medical coverage is what pays for your medical costs in the case of a car accident, whether or not another driver was involved.  This can include chiropractic, physical therapy, emergency medical care, medical tests, etc.

Property coverage pays for damage to your car, if there is a car accident; it also pays for theft of your car.

Comprehensive coverage pays to damage to your car when no car accident has occurred.  For instance, hail damage, failing objects, earthquake, fire, etc.

Collision coverage pays for property damage to your car due to an accident with another vehicle, post, tree, and so on.

What Minnesota Requires of Every Driver

  1. Liability – Bodily Injury
  2. Liability – Property Damage
  3. PIP (Personal Injury Protection) or Medical Pay
  4. Uninsured / Underinsured Motorist Coverage

Iowa Tort Insurance System

What Iowa Requires of Every Driver

  1. Iowa law requires minimum auto coverage of 20/40/15 (including teen drivers)
  2. Iowa Graduated Driver Licensing (GDL) law for teen drivers
  3. Tort liability system

What does 20/40/15 mean?

For your auto insurance coverage as a resident of Iowa, it means that by law you are required to carry coverage on your car of at least $20,000 in bodily injury liability per person, $40,000 total bodily injury liability per accident and $15,000 minimum for property damage liability per accident. With the cost of cars and medical coverage today, it is recommended, but not required, to have higher coverage than the 20/40/15 minimum required by Iowa law due to today’s cost of medical care and vehicle replacement.

What is the Iowa Graduated Driver Licensing (GDL) law?

On January 1, 1999, the state of Iowa began enforcing the Graduated Driver Licensing Law in order to reduce the 40% of fatal or serious traffic injuries caused by teen drivers which represents 17% of drivers on Iowa’s roadways. The GDL is a thorough process consisting of three stages teens must complete to earn their driver’s license: instruction permit, intermediate license, then full license.  Insurance premiums for teens can be lower by:

  • avoiding purchasing luxury and sports cars
  • teens maintaining a B average in school studies
  • teens successfully completing state approved driver safety course
  • opting for a higher deductible
  • and/ or by bundling teen driver coverage with other policies such as homeowner’s, renter’s, life, health, and other vehicle insurances.

What is a Tort Liability System?

A Tort Liability System means there are no restrictions on lawsuits and that if you are involved in an accident, someone must be found to be at fault for the accident.  The determined person at fault for causing the accident is then responsible for all damages.  The state of Iowa advises that drivers carry more than the minimum coverage required by law because of the Tort System.

*Not carrying the required minimum auto insurance may be considered a misdemeanor and may result in the following: arrest; having your vehicle impounded; fines.  Please consult your state’s insurance laws regarding maintaining the proper minimum coverage.

**By the second year of implementation of the GDL law, there was a 10% decrease of teen traffic accidents and teen traffic violations decreased by 27%.

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