Topics covered: Who is insured

Exclusions

Benefits

Relationship with Other Coverages

Other Items

Tort Liability

Who Is Insured

Minnesota no-fault benefits under endorsement PP 05 67 are payable to or for an insured who sustains bodily injury caused by an accident arising out of the maintenance or use of a motor vehicle as a vehicle, or being struck by a motorcycle.

An insured, as used in the endorsement, includes several categories of people.

The named insured or any family member (a person related to the named insured by blood, marriage, or adoption—including minors in the custody of any such person—who is a resident of the named insured's household) is eligible for benefits if injured while occupying any motor vehicle or, as a pedestrian, as a result of an accident involving a motor vehicle or motorcycle.

Any other person qualifies as an insured in one of two ways: (1) by being injured while occupying, or as a pedestrian because of an accident involving, the named insured's covered auto; or (2) by being injured while occupying a motor vehicle that is not owned by the named insured or a family member, if the vehicle is not a public or livery conveyance and the injury results from the named insured's or the family member's operation of the vehicle.

A family member is not covered if he is eligible for benefits as named insured under another policy providing no-fault insurance. If an injured person other than the named insured or a family member is entitled to no-fault benefits as a named insured or family member under another policy, he is excluded as an insured and must look to that other policy for coverage. To this extent, Minnesota no-fault coverage may be said to follow the injured person rather than the vehicle.

Exclusions

Injury to anyone occupying a motorcycle is excluded. However, the named insured and relatives can be covered by using endorsement PP 05 67 for motorcycle injuries they receive as pedestrians.

Other exclusions apply to intentionally self-caused injury or injury arising out of an intentional attempt to cause anyone bodily injury; injury arising in connection with an officiated race or speed contest; injury arising out of conduct within the course of a motor vehicle repair, service, or maintenance business if the conduct occurs on the business premises; injury arising out of conduct in the course of loading or unloading a motor vehicle except while the person injured is occupying the motor vehicle; injury to anyone other than the named insured or a family member arising out of the injured person's maintenance or use of a motor vehicle without a good faith belief that he or she is entitled to do so; injury arising out of the maintenance or the use of a motor vehicle while that vehicle is "located for use" as a residence or premises; and injury arising out of war or nuclear hazards.

As noted earlier, Minnesota no-fault coverage is designed so that, as a general rule, injured persons look to their own no-fault insurance rather than to that attaching to the vehicle when the two sources of coverage are not the same. State law provides for two significant exceptions to this rule, and these exceptions are reflected in endorsement PP 05 67. Excluded from coverage under the endorsement is any injury arising out of the maintenance or use of a motor vehicle (1) being used as a public or livery conveyance, or (2) furnished to the named insured or a family member by his or her employer.

The purpose of these exclusions is clear: benefits for injury that occurs in connection with a public conveyance or employer-furnished vehicle are to be paid by the no-fault insurance on the vehicle, not by the injured person's own insurance. There are certain exceptions to the exclusions in keeping with this purpose. The exclusions apply only when required no-fault coverage on the vehicle is in effect and only when the injury is not to someone occupying another vehicle involved in the accident. (The injured person's own no-fault coverage could be expected to respond in either of these eventualities.) The exclusions also do not apply to the named insured's covered auto, to a commuter van (as defined in the Minnesota no-fault act), to any bus while in operation in the state with respect to any state resident who is an insured as defined in the no-fault act, to a vehicle being used to transport children to school or school-sponsored activity or as part of a family or group family day care program, or to a passenger in a taxi.

PP 05 67 also does not respond if a lapse of one year or more occurs in the period of disability and medical treatment of an insured as a result of any one accident. The endorsement does not provide coverage for bodily injury sustained by any insured, other than the named insured or any family member, while a pedestrian when struck by the named insured's covered auto if the accident occurs outside of Minnesota.

A final exclusion relates only to certain benefits, namely, the work loss benefit, essential services benefit, and survivors' loss benefit. These benefits are not available for bodily injury sustained by an insured while occupying any motor vehicle that is not owned by the named insured or any family member, but is being operated by the named insured or any family member.

Benefits

Minnesota no-fault benefits are payable in five categories with total benefits subject to a maximum limit for the total of all personal injury protection benefits in the amount of $40,000. This limit can be modified at the insured's request and by noting on the endorsement that the maximum limit for the total of all benefits applies on a per "your covered auto" basis. With this modification an insured under a policy providing no-fault coverage on three automobiles could collect up to $120,000 in benefits under the applicable aggregate limits.

Medical expenses are reasonable expenses for necessary medical and rehabilitative services, prosthetic devices and prescription drugs, ambulance services or other transportation expenses; and sign interpreting and language translation service, except if provided by the insured's family member. These expenses are covered up to a maximum of $20,000. The benefit includes necessary remedial treatment and services recognized and permitted under state law for an insured who relies upon spiritual means through prayer alone for healing. Medical expenses do not include expenses in excess of those for a semiprivate room unless more intensive care is medically required.

The work loss benefit is 85 percent of loss of gross income, up to $250 per week, resulting from the insured's inability to work on a regular basis. Work loss includes the cost to a self-employed person of hiring substitute employees, and lost unemployment benefits if the insured is eligible for such benefits at the time of the injury or loses such eligibility because of the injury.

Essential services are expenses up to $200 per week reasonably incurred beginning eight days after the date of the accident by an insured during his lifetime. These expenses are for "usual and necessary" services to replace those the insured would have performed—had there been no injury—for his own benefit or that of his household rather than for income.

The funeral expenses benefit are for reasonable expenses for professional funeral and burial services (including cremation). The limit for this benefit category is $2,000.

The survivors' loss benefit comprises two subcategories of loss: (1) loss of contributions of money or other things of economic value (except services) that surviving dependents would have received during their dependency from an insured who dies within one year of the date of the accident; and (2) the cost to surviving dependents of obtaining substitute services that would have been performed by the deceased insured, less any expenses made no longer necessary by the insured's death. Recovery within each subcategory is governed by a separate $200 weekly limit. The dependency of the surviving spouse ends when that spouse remarries or dies; the dependency of a child ends when that child attains majority, marries, or dies.

Relationship with Other Coverages

Minnesota no-fault benefit payments are reduced by the amount of any workers compensation benefits payable for the same injury. Duplication of no-fault benefits is prohibited; liability of a no-fault insurer when no-fault recovery is available from more than one source is prorated on the basis of policy limits. Endorsement PP 05 67 stipulates in its other insurance clause that the aggregate applicable to essential services expenses and survivors' loss benefits under one policy must be exhausted before payments in these benefit categories may be collected under another applicable policy.

Other Items

Endorsement PP 05 67 offers deductibles for the medical expenses coverage and the work loss benefit. If the named insured chooses these deductibles, that choice is checked on the schedule of the endorsement in a specified amount; the deductibles are applicable only to the named insured and any family members.

Another item of interest is the exclusion of work loss. In consideration of a reduction in premium, work loss can be excluded for the named insured age sixty-five or older; this also can be made applicable to family members that are sixty-five or older. If the named insured or family member is retired and receiving a pension, the age limit is lowered to 60.

A "motor vehicle" is defined as every vehicle that is required by Minnesota law to be registered and designed to be self-propelled by an engine or motor for use primarily upon public roads, highways, or streets. However, the definition of a "motor vehicle" does not include a motorcycle or any vehicle with fewer than four wheels.

The named insured's "covered auto" means a motor vehicle to which the bodily injury liability coverage of the auto policy applies and for which the named insured is required by the no-fault act to maintain security.

If the insured and the insurer do not agree on the amount of benefits payable, and the amount in dispute is $10,000 or less, the matter goes to arbitration. If the amount is more than $10,000, the insurer will advise the insured whether it will submit the claim for arbitration.

Tort Liability

Under the Minnesota no-fault statute, recovery in tort for injury arising out of the operation, ownership, maintenance, or use of a motor vehicle on which no-fault coverage is provided is reduced by the amount of no-fault benefits paid or payable (including any applicable deductible) for the injury.

The statute abolishes recovery for noneconomic loss (pain and suffering, inconvenience, etc.) except in connection with injuries causing medical expenses of more than $4,000 or resulting in permanent disfigurement or injury, disability lasting at least sixty days, or death.