Liability Insurance. Liability insurance is coverage that protects the insured person in case they negligently cause damage to another person. Both automobile and homeowner’s policies have liability protection for the insured. In addition, this coverage will provide a lawyer to defend the insured person in case they get sued.
You should talk with your insurance agent or lawyer about how much liability coverage you should have. Generally, the more assets a person has, the more liability insurance they should purchase. This is because an injured person has a claim against the negligent person for all of their losses, not just up to the limit of insurance the negligent person purchased. So, for example, if a negligent driver has not purchased high enough limits of insurance coverage, then an injured person may be able to collect money from the negligent person.
No-Fault Coverage. No-Fault is short for the Minnesota No-Fault Act. It is also used when referring to your own car insurance company. No-Fault is a group of laws that describes a person’s right to receive payment for medical bills, wage loss and some other things from their own insurance company. It does not pay for pain and suffering, and has nothing to do with the injured person’s claims against the person who caused the injuries. That is why it is called “No-Fault.” Rather, the main questions that need to be answered when deciding whether your own insurance company has to pay your medical bills, wage loss or other No-Fault benefits are:
Was the policy in effect at the time of the crash?
Was the injured person insured under the policy?
Is the claim the injured person is making related to an injury they suffered in the crash?
Is the claim covered under the policy?
Is the medical treatment reasonable and necessary treatment?
Is there adequate documentation to prove the claim?
The benefits covered by the No-Fault insurance include medical bills, wage loss, retraining and housekeeping services known as replacement services or essential services. Most of these benefits are payable to others as well in the case of a death caused by the crash. There is also a provision in the No-Fault Act for the payment of funeral expenses.
No-Fault insurance covers up to $20,000 in medical treatment and $20,000 in wage loss. However, if you have multiple vehicles on your policy, be sure to discuss with your insurance agent adding stacking to your coverage. Stacking means that you can add another $20,000 for each vehicle on the policy. For example, if a person on your policy was injured and you had two vehicles on your policy, they would have twice the amount of coverage under stacking ($40,000 in medical treatment and $40,000 in wage loss). Keep in mind that stacking is not automatically added to your coverage, so make sure to ask your insurance agent about it. There is a nominal premium for adding stacking to your policy, but the benefit of the additional coverage greatly outweighs the additional nominal sums paid.
Uninsured Motorist Coverage. This is a mandatory coverage in Minnesota. It is coverage on your own car insurance policy and it covers you, anyone else named on the policy, your family and all people who ride in your car. It provides for money for your personal injury in case the driver responsible for causing the crash does not have any liability insurance on his car.
Underinsured Motorist Coverage. Underinsured motorist coverage is also on your own policy and it provides money for you, anyone else named on your policy, your family and any other people riding in your car when the crash occurs in case the driver responsible for causing the crash does not have enough insurance coverage to fully pay for all the harm they caused. For example, if the negligent driver caused $55,000 of injuries but only carried $30,000 in liability coverage, then the injured person can ask their own insurance company to pay the additional $25,000 in underinsured benefits.