Which insurance pays my medical bills if I am in a Car Crash?

This is a common question we get from many clients. Many people think if they are in a car crash and the other driver is at fault, then the other driver’s car insurance should pay the bills. Makes sense, but in Minnesota, that is usually not the case. Minnesota is a “No-Fault” state, which means, that in most instances if you are injured in a car accident, your own car insurance will pay your medical expenses. In your car insurance policy, this benefit is listed as Personal Injury Protection or “PIP” benefits.

What are Minnesota No-Fault Benefits?
PIP benefits in Minnesota provide a minimum of $20,000 in health care expenses as well as $20,000 in wage loss benefits. There are other benefits under the PIP policy when your are involved in a car crash such as replacement services, funeral, and rehabilitation benefits; but the two most common are the medical and wage loss benefits. What this means, is that regardless of fault, your car insurance company will pay the first $20,000 of your medical expenses, as well as the first $20,000 of any wage loss you incur as a result of your injuries from the accident. Therefore, it is always important to notify your own insurance company of an accident or collision so that a proper claim is set up and benefits properly paid. It is also wise to consult with a personal injury attorney if you have questions or are not sure about the process.

What happens if your medical expenses or wage loss exceed the $20,000 limit? When this happens, and if you have health insurance, your health insurer will ask for verification that your PIP Benefit has been exhausted and then they will begin paying your bills. Once your health insurance kicks in, it pays just like any other medical bill, meaning subject to any deductible and terms of your health insurance contract. Continued wage loss can be submitted to any disability insurance policy you have, but most folks do not have that type of coverage. One benefit of having your PIP benefits pay your health expenses is that it pays 100% of the bill. There should be no deductible or co-pay. If there is, you should consult with an injury attorney immediately.

What is No-Fault Stacking?
Remember, the PIP limits discussed above are the minimum limits required in any automobile insurance policy sold in Minnesota. You can always purchase additional coverage should you desire. One benefit many insurers do not often promote is “Stacking”. If you elect Stacking on your auto policy, your PIP benefits are multiplied by the number of vehicles you have insured under the policy. So if you have three vehicles insured under the policy, and you elect Stacking; you would then have $60,000 in available medical expense benefits and $60,000 in available wage loss benefits. The additional cost to elect Stacking is minimal compared to the increased coverage you obtain. Make sure you ask about Stacking your No-Fault benefits next time you renew your car insurance!