Frequently Asked Questions about Auto Insurance
Stewartville, MN

Minnesota Auto Insurance Facts

• The car in the rear in the accident is not automatically at fault
• Independent witnesses are the best resources to determine liability
• MN law does not require comp or collision coverage, but your lienholder will
• There is no “grace period” beyond the premium due date
• Your agent is not required to call you to remind you that your premium is due
• Your MN policy provides coverage outside the state, any where in the US and  Canada, but not Mexico

What is auto insurance?

Auto insurance is a way of sharing the risks of driving between you & your insurance company.  The way it works is simple.  You pay a set premium to an insurance company for coverage and in return, the company promises to pay for specific financial losses that might occur during the term of the policy.  Most people rely on auto insurance to protect themselves against loss in the event of an accident.  In MN you must carry basic insurance to cover the cost of losses you cause to others in an accident.  If the unexpected happens, insurance will give you the peace of mind in knowing you are protected.

What are the major factors that affect auto insurance rates?

Age and gender of driver, driving record, use of car, garaging address, number of vehicles, coverages & limits, deductibles and the type of car

Does my auto insurance cover other drivers?

While policy language varies from company to company, auto policies generally cover anyone given permission to drive your auto.  Normally all coverages remain in effect, regardless of the driver.  Permission is automatically granted to all members of your household unless a driver is specifically excluded from your policy.

What is No-Fault Coverage?

No Fault coverage is a very misunderstood term.  The No Fault law is a MN law.  It was created to help ease the burden of courts and to ensure prompt treatment for accident victims.  No Fault covers your medical costs, wage loss, replacement services such as housekeeping and in the event of death $2000 in funeral expenses.  Minimum coverage is $40,000-$20,000 Medical and $20,000 non-medical.  Higher coverages can be purchased.  No Fault coverage does not apply to motorcycle or snowmobile policies.

What are Uninsured motorists and Underinsured motorists insurance?

Uninsured motorists (UM) coverage applies to bodily injury to you, your family and other occupants of your vehicle when hit by an uninsured motorist or a hit and run driver.  It also covers you and your family if injured as a pedestrian when struck by an uninsured motorist or a hit and run driver.

Underinsured motorists (UIM) coverage increases the bodily injury protection you and the people in your car up to the amount of coverage you purchase.  It becomes effective when the party causing an accident has lower bodily injury limits than your UIM limits.  The maximum paid is the difference between the two limits.

What is the difference between comprehensive and collision coverage on an auto policy?

Comprehensive losses or other than collision pays for damage to your auto resulting from fire, vandalism, water, hail, glass breakage, falling objects, civic commotion or hitting a bird or animal.

Collision coverage pays for physical damage to your auto caused by your auto colliding with an object, another vehicle or an overturn.  Collision coverage will pay to repair your vehicle up to the amount equal to the value of the vehicle before the accident.

What is Total Replacement Cost of a homeowner’s policy?

This is defined as the cost to replace an entire dwelling of equal quality and utility.  This square foot valuation method generates a total replacement cost for the residence.  The prices use labor, materials, overhead, profit and fees that are currently in effect prior to the incidence of loss.  Companies vary from 100-140% of the insured value.