Minnesota · Insurance Adjuster Sample Interactive Mind Map
Minnesota Adjuster Regulations
A visual breakdown of the Minnesota rules an adjuster is tested on — and the places where the national rule is simply reversed.
Minnesota is an unusual state to study. Its claims-practices statute names adjusters personally and then deletes the “general business practice” element every national course teaches — one violation is actionable. Its bad-faith remedy is a capped taxable-costs award, not punitive damages, and appraisal or arbitration extinguishes it entirely. And § 72B.10 does something few states do: it exempts staff adjusters from licensing while binding them to the conduct rules anyway.
So explore it. Click through the clusters, then take the scenario quiz at the end and see which numbers have actually stuck.
Minnesota licenses three CLASSES of adjuster and offers three LINES of authority — and the class it does not license is still bound by the conduct rules.
Minn. Stat. ch. 72B runs about two dozen sections and is considerably more detailed than most states’ adjuster law. § 72B.10 is the section most states simply do not have.
Minn. Stat. ch. 72B runs about two dozen sections and is considerably more detailed than most states’ adjuster law. § 72B.10 is the section most states simply do not have.
| Class — § 72B.03 subd. 2 | Lines of authority | Fee & term |
|---|---|---|
| Independent adjuster | Property & casualty · Workers’ compensation · Crop | $50 · perpetual |
| Public adjuster | Same three lines, first-party only — plus a $10,000 bond | $50 · perpetual |
| Crop hail adjuster | A limited class of its own | $50 · perpetual |
| Emergency independent adjuster — § 72B.06 | registration, not a license | $20 · 180 + 180 days |
| Staff / company adjuster | No license required — but § 72B.10 binds you to the conduct rules anyway. | |
the license never expires while the fee is paidrenewal falls on the last day of your BIRTH MONTH
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Crop appears TWICE — once as a line, once as a class
§ 72B.03 subd. 2 creates three classes: the independent adjuster’s license, the public adjuster’s license, and the crop hail adjuster’s license. Independent and public adjusters then qualify in one or more lines — “property and casualty; or workers’ compensation; or crop.”
So crop is both a line you can add to an independent adjuster license and a standalone limited class. § 72B.055 adds the federal overlay: a licensed crop hail adjuster who has completed the Federal Crop Insurance Corporation loss adjustment training and competency testing “may act as an adjuster in this state in regard to Multiple Peril Crop Insurance policies regulated by the FCIC.”
A question that asks how many license classes Minnesota has and a question that asks how many lines of authority it has have the same numeral and different answers. Read the noun.
So crop is both a line you can add to an independent adjuster license and a standalone limited class. § 72B.055 adds the federal overlay: a licensed crop hail adjuster who has completed the Federal Crop Insurance Corporation loss adjustment training and competency testing “may act as an adjuster in this state in regard to Multiple Peril Crop Insurance policies regulated by the FCIC.”
A question that asks how many license classes Minnesota has and a question that asks how many lines of authority it has have the same numeral and different answers. Read the noun.
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The definition turns on your TAX treatment — which is why employees fall outside it
§ 72B.02 subd. 5 is a two-part test. An independent adjuster contracts for compensation with insurers or self-insurers, and receives tax treatment consistent with independent-contractor status rather than employee status.
Prong two is doing the work. If the carrier issues you a W-2, you are outside the definition — and therefore outside the licensing requirement. Minnesota did not carve staff adjusters out; the definition never reached them.
§ 72B.02 subd. 6 defines a public adjuster by the opposite alignment: a person who, “for compensation or any other thing of value on behalf of the insured,” acts in negotiating the settlement of first-party claims for real or personal property — or who advertises or solicits that business. First party only. A public adjuster has no role in a liability claim.
Prong two is doing the work. If the carrier issues you a W-2, you are outside the definition — and therefore outside the licensing requirement. Minnesota did not carve staff adjusters out; the definition never reached them.
§ 72B.02 subd. 6 defines a public adjuster by the opposite alignment: a person who, “for compensation or any other thing of value on behalf of the insured,” acts in negotiating the settlement of first-party claims for real or personal property — or who advertises or solicits that business. First party only. A public adjuster has no role in a liability claim.
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§ 72B.10 — exempt from the LICENSE, not from the RULES
This is the Minnesota provision most states lack, and it is the single most testable thing in the chapter.
A staff adjuster “shall not be subject to the application, licensing, or examination requirements” of the chapter — but “shall not, however, engage in any of the practices prohibited” by § 72B.08 subd. 1, clauses (3) through (15).
And the enforcement runs uphill: a $500 fine may be imposed on the INSURER for the staff adjuster’s violation. The carrier pays for its unlicensed employee’s misconduct.
Add § 72A.201 subd. 3(1) to this, which defines “adjuster” by cross-reference “as defined in section 72B.02” — reaching independent, public and staff adjusters. The claim-handling deadlines bind the unlicensed staff adjuster personally.
“No license required” is not the same sentence as “not regulated.” In Minnesota those two things come apart, and the exam knows it.
A staff adjuster “shall not be subject to the application, licensing, or examination requirements” of the chapter — but “shall not, however, engage in any of the practices prohibited” by § 72B.08 subd. 1, clauses (3) through (15).
And the enforcement runs uphill: a $500 fine may be imposed on the INSURER for the staff adjuster’s violation. The carrier pays for its unlicensed employee’s misconduct.
Add § 72A.201 subd. 3(1) to this, which defines “adjuster” by cross-reference “as defined in section 72B.02” — reaching independent, public and staff adjusters. The claim-handling deadlines bind the unlicensed staff adjuster personally.
“No license required” is not the same sentence as “not regulated.” In Minnesota those two things come apart, and the exam knows it.
✅ § 72B.03 subd. 1 — FOURTEEN exemptions
📌 What it means on the ground
Attorneys
Exempt while “acting in a professional capacity as an attorney”The capacity is the condition
An attorney running a claims operation is not practicing law, and the exemption stopsFact-gatherers and technical assistants
People who collect information but do not adjustThe verb is the tripwire
Gathering is exempt. Deciding what gets paid is adjusting.Fraud investigators
Exempt only if they do not adjust lossesSIU has a ceiling
The moment the investigator sets the payment, the exemption is goneExecutive, administrative, managerial, clerical staff
Support functions inside a carrier or agencyTitles do not adjust claims
The exemption follows the function, not the job descriptionLicensed producers within their authority
Producers settling within the scope of their own licenseNarrow, not general
It is bounded by producer authority — it is not a free adjuster license§ 72B.03 subd. 3 — the payment ban that catches the hiring side“No insurer, agent, or other representative of an insurer nor any adjuster shall pay any fee or other compensation to any person for acting as an adjuster, except to a person duly licensed.” Read who is prohibited: not only the unlicensed adjuster who takes the money, but the insurer, the agent and the adjuster who pay it. A licensed adjuster who subcontracts a file to an unlicensed person and pays them has violated this section personally. Most states police only the person doing the adjusting.
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Public Adjusters — 72 Hours and Eleven Prohibitions
§ 72B.135 for conduct — but the bond lives in § 72B.041 subd. 3
- Cite the bond correctly. Everyone associates the $10,000 bond with § 72B.135. It is in § 72B.041 subd. 3 — “with the state of Minnesota as obligee” — covering “fraud, dishonesty, forgery or theft.”
- 72 hours to cancel — subd. 1. Written notice in any form indicating an intention not to be bound, and if mailed it is “effective upon deposit in a mailbox.” The clock runs from signature, not from the loss
- Two documents, not one — subd. 2 requires a statement “in boldface type of a minimum size of ten points” plus a fully completed detachable duplicate form captioned “NOTICE OF CANCELLATION” bearing the adjuster’s name, address and the deadline date
- Ten days to return everything after cancellation — except compensation for emergency services performed inside the 72 hours, defined narrowly as “the removal of water, boarding up a building, and reconnecting lights and heat”
- Eleven prohibited practices — subd. 4. No paying for referrals · no inducements · no rebating · no contact between 8 p.m. and 8 a.m. · no fee-splitting with a non-public-adjuster · no direct or indirect interest in a construction, salvage or appraisal firm · no advising on questions of law · no soliciting a client already under contract
- Disclose, display, and say it out loud — subd. 5. On solicitation the adjuster must display a license, “immediately inform the client that the adjuster does not represent an insurance company” or its adjusting firm, hand over a card, and disclose the fee in writing
- An office and five years of files — subd. 6, open to Commerce inspection, “for at least five years after the end of the contracted employment period.” And the contract “is valid only if signed by an insured and the property owner” — a tenant’s signature alone will not do
- Non-interest-bearing trust or escrow account for claim funds — § 72B.136 — at a federally insured institution in the adjuster’s home state or where the loss occurred
- No fee cap and no catastrophe solicitation moratorium. Chapter 72B contains no percentage ceiling on public adjuster compensation — only disclosure duties and the anti-rebate and anti-fee-splitting bans. And there is no post-disaster waiting period before soliciting
The license does not expire.§ 72B.03 subd. 2: “An adjuster license remains in effect unless probated, suspended, revoked, or refused as long as the fee … is paid.” There is no fixed term. Renewals fall on the last day of your birth month and run “at least 12 months, but no more than 24 months” (§ 72B.041 subd. 6); business entity initial licenses expire October 31. Let it lapse and reissuance within 12 months costs double the renewal fee as a penalty. Do not answer “two years” out of habit — two years is the CE biennium, not the license term.
Minnesota asks nothing of you before the exam and a great deal of you after it.
No pre-licensing course. A $25, one-hour, 35-question PSI exam you may retake immediately. But fingerprints are mandatory, and CE is 24 hours with 3 in ethics.
No pre-licensing course. A $25, one-hour, 35-question PSI exam you may retake immediately. But fingerprints are mandatory, and CE is 24 hours with 3 in ethics.
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There is no pre-licensing education requirement — for any class
No course, no hours, no certificate, no completion window. § 72B.041 requires that you be at least 18, meet your home state’s residency requirement, apply on the NAIC Uniform Individual Application (business entities use the Uniform Business Entity Application), consent to a background check, and pass the exam.
Applications go through Sircon. Exams are scheduled with PSI.
The absence of a course is a real finding, not an omission from your notes. It is also the reason the exam matters more here than in states that front-load 40 classroom hours.
Applications go through Sircon. Exams are scheduled with PSI.
The absence of a course is a real finding, not an omission from your notes. It is also the reason the exam matters more here than in states that front-load 40 classroom hours.
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Fingerprints ARE required — and there are two routes at two different prices
§ 72B.041 subd. 2 requires every resident independent and public adjuster applicant to “consent to a criminal history record check” and “submit a fingerprint card in a form acceptable to the commissioner.” The records are held by the commissioner as confidential.
Route one — electronic capture at a PSI test center: $63.75. Commerce says the fee “includes charges for background checks conducted by the Bureau of Criminal Apprehension and the FBI as well as PSI vendor processing fees.” No walk-ins.
Route two — a manual card taken to a local police station and mailed to the Department of Commerce with the consent form and a $32.00 check.
The authorization expires in one year. Get printed too early and you print again.
Many adjuster states require neither prints nor a background check. Minnesota requires both, so this is a live distinguisher on a multi-state question.
Route one — electronic capture at a PSI test center: $63.75. Commerce says the fee “includes charges for background checks conducted by the Bureau of Criminal Apprehension and the FBI as well as PSI vendor processing fees.” No walk-ins.
Route two — a manual card taken to a local police station and mailed to the Department of Commerce with the consent form and a $32.00 check.
The authorization expires in one year. Get printed too early and you print again.
Many adjuster states require neither prints nor a background check. Minnesota requires both, so this is a live distinguisher on a multi-state question.
| PSI exam — bulletin dated 1/6/2026 | Detail |
|---|---|
| Exams offered | Property & Casualty Adjuster · Workers’ Compensation Adjuster · Crop Adjuster |
| Scored questions | 35 — plus 5 to 15 unscored experimental |
| Time limit | 1 hour — for every item, scored or not |
| Passing score | 70% correct — stated as a percentage, no scaled-score language |
| Fee | $25 per attempt |
| Retake wait | None — and no cap on attempts |
35 is the SCORED count, not the count you will seethe clock does not stop for experimental items
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You may face 50 questions in the 60 minutes budgeted for 35
PSI adds 5 to 15 unscored experimental questions to every adjuster exam, and the bulletin states it plainly: “these questions will count against examination time.”
So the honest pacing arithmetic is 40 to 50 items in 60 minutes — roughly 72 to 90 seconds each, not the 103 seconds that 35 questions would suggest. You cannot tell which items are experimental and you are not told how many you got.
And there is no waiting period to retake. PSI: “A candidate who tests unsuccessfully on a Wednesday can call the next day, Thursday, and retest as soon as Friday, depending upon space availability.” No mandated wait, no cap on attempts — you pay $25 again and sit again.
One exam serves two classes. § 72B.041 subd. 4 applies the same requirement to independent and public adjuster applicants. There is no separate Minnesota public adjuster exam.
So the honest pacing arithmetic is 40 to 50 items in 60 minutes — roughly 72 to 90 seconds each, not the 103 seconds that 35 questions would suggest. You cannot tell which items are experimental and you are not told how many you got.
And there is no waiting period to retake. PSI: “A candidate who tests unsuccessfully on a Wednesday can call the next day, Thursday, and retest as soon as Friday, depending upon space availability.” No mandated wait, no cap on attempts — you pay $25 again and sit again.
One exam serves two classes. § 72B.041 subd. 4 applies the same requirement to independent and public adjuster applicants. There is no separate Minnesota public adjuster exam.
Exam exemptions — § 72B.041 subd. 5Three, and only three: an adjuster currently licensed in another state for a matching line of authority; crop hail adjusters; and those who have completed National Crop Insurance Services training. Note that the reciprocity exemption is keyed to the line, not to the license generally — a currently licensed property and casualty adjuster from elsewhere gets no free pass into the workers’ compensation line.
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Designated Home State — seventeen jurisdictions, and the exam answer is conditional
Minnesota is a Designated Home State for adjusters who live in states that do not license them. Commerce lists DHS applicants as “exclusively residents of CO, DC, IA, IL, KS, MA, MD, MO, NE, ND, NJ, OH, PA, SD, TN, VA, WI.” Seventeen jurisdictions — count DC.
The exam consequence flips on your election. If you designate Minnesota as your home state, “you must pass the Minnesota adjuster examination.” The out-of-state licensure exemption is unavailable to you, because you have no adjuster license anywhere to be exempted on.
Nonresidents — § 72B.05. You must be “currently licensed in good standing as an adjuster in the person’s resident or home state,” and that state must license Minnesotans “on the same basis.” Reciprocity is a continuing condition: “As a condition to continuation of a nonresident adjuster license, the licensee must maintain a resident adjuster license in the licensee’s home state.” If the home state license ends, the Minnesota license terminates by operation of law. You do not get a grace period, and Minnesota does not have to act.
The exam consequence flips on your election. If you designate Minnesota as your home state, “you must pass the Minnesota adjuster examination.” The out-of-state licensure exemption is unavailable to you, because you have no adjuster license anywhere to be exempted on.
Nonresidents — § 72B.05. You must be “currently licensed in good standing as an adjuster in the person’s resident or home state,” and that state must license Minnesotans “on the same basis.” Reciprocity is a continuing condition: “As a condition to continuation of a nonresident adjuster license, the licensee must maintain a resident adjuster license in the licensee’s home state.” If the home state license ends, the Minnesota license terminates by operation of law. You do not get a grace period, and Minnesota does not have to act.
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Catastrophe registration — the insurer files, in five days, and it runs a full year at the outside
§ 72B.06 lets an adjuster “otherwise qualified to adjust claims, but not already licensed in Minnesota” work a catastrophe as a registered emergency independent adjuster — no exam, no fingerprints, no license.
The insurer registers, not the adjuster: “An insurer must notify the commissioner via registration of each independent adjuster” deployed for the catastrophe. The deadline is “within five days of deployment to adjust claims arising from the catastrophe.” Deployment starts the clock — not the storm, not the declaration.
180 days, extendable by another 180. That is a full year of authority at the outside, far more generous than the 90-day windows common elsewhere.
The fee is $20 — and it is one fee, not two. The “registration of each nonlicensed adjuster who is required to register under section 72B.06” in § 72B.041 subd. 9 is the catastrophe registration.
Registration buys no freedom from the rules. The commissioner “may summarily suspend or revoke the right of any person adjusting in this state” who engages “in any of the practices forbidden to a licensed adjuster.” Note the word summarily.
The insurer registers, not the adjuster: “An insurer must notify the commissioner via registration of each independent adjuster” deployed for the catastrophe. The deadline is “within five days of deployment to adjust claims arising from the catastrophe.” Deployment starts the clock — not the storm, not the declaration.
180 days, extendable by another 180. That is a full year of authority at the outside, far more generous than the 90-day windows common elsewhere.
The fee is $20 — and it is one fee, not two. The “registration of each nonlicensed adjuster who is required to register under section 72B.06” in § 72B.041 subd. 9 is the catastrophe registration.
Registration buys no freedom from the rules. The commissioner “may summarily suspend or revoke the right of any person adjusting in this state” who engages “in any of the practices forbidden to a licensed adjuster.” Note the word summarily.
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24 hours of CE, THREE of them ethics, and only two exemptions
§ 72B.045 subd. 1, verbatim: a licensee “must satisfactorily complete a minimum of 24 hours of continuing education courses, of which three hours must be in ethics, reported to the commissioner on a biennial basis in conjunction with the individual’s license renewal cycle.”
Two exemptions, and only two — subd. 2: “(1) a licensee not licensed for one full year prior to the end of the applicable continuing education biennium; or (2) a licensee holding a nonresident adjuster license who has met the continuing education requirements of the licensee’s designated home state.”
Note what is not on that list: no age exemption, no years-of-service exemption, and no exemption for public adjusters — the section reads “an independent or public adjuster license.” Public adjusters carry the full 24 hours including the ethics hours.
Fees — § 72B.041 subd. 9, verbatim: “A fee of $50 is imposed for each initial license or temporary permit and $50 for each renewal thereof or amendment thereto. A fee of $20 is imposed for the registration of each nonlicensed adjuster.” Budget also for two charges the statute does not contain: a technology surcharge under § 45.24 of “up to $40 for each two-year licensing period” — the operative amount is published inconsistently, so confirm it at checkout — and the Sircon or NIPR transaction fee.
Two exemptions, and only two — subd. 2: “(1) a licensee not licensed for one full year prior to the end of the applicable continuing education biennium; or (2) a licensee holding a nonresident adjuster license who has met the continuing education requirements of the licensee’s designated home state.”
Note what is not on that list: no age exemption, no years-of-service exemption, and no exemption for public adjusters — the section reads “an independent or public adjuster license.” Public adjusters carry the full 24 hours including the ethics hours.
Fees — § 72B.041 subd. 9, verbatim: “A fee of $50 is imposed for each initial license or temporary permit and $50 for each renewal thereof or amendment thereto. A fee of $20 is imposed for the registration of each nonlicensed adjuster.” Budget also for two charges the statute does not contain: a technology surcharge under § 45.24 of “up to $40 for each two-year licensing period” — the operative amount is published inconsistently, so confirm it at checkout — and the Sircon or NIPR transaction fee.
📝 Standards, records, reporting
§ 72B.106 — six standards of conduct. Be “honest and fair in all communications”; give “prompt, knowledgeable service and courteous, fair, and objective treatment at all times”
Must not give legal advice, and must not deal directly with a policyholder or claimant represented by counsel without counsel’s consent
§ 72B.105 — records. Keep a copy of each contract and “comply with the record retention policy as agreed to in that contract.” No number of years for independent adjusters. Public adjusters: five years plus an office
§ 72B.107 — 30 days to report an administrative action in any jurisdiction and 30 days to report a criminal action, with the orders and the initial complaint
§ 72B.11 — the commissioner may “by order, require any licensee … to produce any records” and examine persons under oath
⚡ Discipline — § 72B.08
Fifteen grounds in subd. 1 — and clauses (3) through (15) bind unlicensed staff adjusters too
Three that surprise people: cheating on a licensing examination, failure to comply with a child support order, and failure to pay state income tax
§ 45.027 subd. 6: a civil penalty “not to exceed $10,000 per violation.” Per violation — not per claim, not per year
You cannot resign your way out. Subd. 4 preserves enforcement “even if the person’s license or registration has been surrendered or has expired by operation of law”
There is no Minnesota adjuster RULE chapter. § 72B.12 gives permissive rulemaking authority that has never been exercised. Minnesota Rules ch. 2795 is “Insurance Agents” — not adjusters
Minnesota deleted the element that protects adjusters almost everywhere else — and then took away the private lawsuit that usually follows.
One violation is administratively actionable. But nobody can sue you under the claims practices act, and a violation of it is not even admissible in the bad-faith case.
One violation is administratively actionable. But nobody can sue you under the claims practices act, and a violation of it is not even admissible in the bad-faith case.
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The statute names YOU — and it does not require a general business practice
§ 72A.201 is titled “Regulation of Claims Practices,” and its operative subdivisions all open the same way:
“The following acts by an insurer, an adjuster, a self-insured, or a self-insurance administrator constitute unfair settlement practices…”
Subdivisions 4, 5, 6, 7, 8 and 9 carry that opener. And subd. 3(1) defines “adjuster” by cross-reference to § 72B.02 — reaching independent, public and staff adjusters.
§ 72A.201 subd. 1, second sentence: “The commissioner need not show a general business practice in taking an administrative action for these violations.”
That sentence covers § 72A.201 and § 72A.20 subd. 12 — even though subd. 12’s own text embeds a “with such frequency to indicate a general business practice” trigger. Minnesota legislated straight through its own frequency element.
The NAIC Unfair Claims Settlement Practices Model Act, on which most national courses are built, conditions liability on conduct committed flagrantly or “with such frequency as to indicate a general business practice.” That is not the Minnesota rule. A single missed deadline is actionable.
Frequency has not vanished — it moved. Subd. 2 makes it go to penalty severity: the Department weighs “the magnitude of the harm to the claimant or insured” and aggravating conduct. Frequency affects how hard you are hit, not whether you are liable.
“The following acts by an insurer, an adjuster, a self-insured, or a self-insurance administrator constitute unfair settlement practices…”
Subdivisions 4, 5, 6, 7, 8 and 9 carry that opener. And subd. 3(1) defines “adjuster” by cross-reference to § 72B.02 — reaching independent, public and staff adjusters.
§ 72A.201 subd. 1, second sentence: “The commissioner need not show a general business practice in taking an administrative action for these violations.”
That sentence covers § 72A.201 and § 72A.20 subd. 12 — even though subd. 12’s own text embeds a “with such frequency to indicate a general business practice” trigger. Minnesota legislated straight through its own frequency element.
The NAIC Unfair Claims Settlement Practices Model Act, on which most national courses are built, conditions liability on conduct committed flagrantly or “with such frequency as to indicate a general business practice.” That is not the Minnesota rule. A single missed deadline is actionable.
Frequency has not vanished — it moved. Subd. 2 makes it go to penalty severity: the Department weighs “the magnitude of the harm to the claimant or insured” and aggravating conduct. Frequency affects how hard you are hit, not whether you are liable.
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Nobody can sue you under it — and a violation is not even admissible
The statute closes the door itself. § 72A.201 subd. 1: “No individual violation constitutes an unfair, discriminatory, or unlawful practice in business, commerce, or trade for purposes of section 8.31.” § 8.31 is Minnesota’s private-attorney-general statute.
The Supreme Court closed it too. Morris v. American Family Mutual Insurance Co., 386 N.W.2d 233 (Minn. 1986): “a private person does not have a cause of action for a violation of the Unfair Claims Practices Act.”
And you cannot smuggle it in the back door. Schermer v. State Farm Fire & Casualty Co., 702 N.W.2d 898 (Minn. Ct. App. 2005): a litigant cannot sue directly “or use an alleged violation of this statute to prove elements of a common law claim.”
Nor in the statutory bad-faith case. § 604.18 subd. 4(d)(4) makes provisions under “chapters 59A to 79A” and their rules “not admissible as standards of conduct.” Chapter 72A sits squarely inside that range. You cannot prove bad faith by showing the adjuster blew the 30-business-day deadline.
So who enforces § 72A.201? The Commissioner of Commerce — administratively, through fines under §§ 72A.22 to 72A.25 and license action under § 72B.08, at up to $10,000 per violation. That is a regulatory exposure aimed at you personally, not a damages claim for the insured.
The Supreme Court closed it too. Morris v. American Family Mutual Insurance Co., 386 N.W.2d 233 (Minn. 1986): “a private person does not have a cause of action for a violation of the Unfair Claims Practices Act.”
And you cannot smuggle it in the back door. Schermer v. State Farm Fire & Casualty Co., 702 N.W.2d 898 (Minn. Ct. App. 2005): a litigant cannot sue directly “or use an alleged violation of this statute to prove elements of a common law claim.”
Nor in the statutory bad-faith case. § 604.18 subd. 4(d)(4) makes provisions under “chapters 59A to 79A” and their rules “not admissible as standards of conduct.” Chapter 72A sits squarely inside that range. You cannot prove bad faith by showing the adjuster blew the 30-business-day deadline.
So who enforces § 72A.201? The Commissioner of Commerce — administratively, through fines under §§ 72A.22 to 72A.25 and license action under § 72B.08, at up to $10,000 per violation. That is a regulatory exposure aimed at you personally, not a damages claim for the insured.
🔒 What Minnesota takes AWAY
No private right of action under the claims practices act — and no back door through § 8.31
No common-law FIRST-PARTY bad faith tort at all. Morris: “a bad faith breach of contract does not convert the breach of contract into a tort”
A § 604.18 claim may not be pleaded in the original complaint — you move to amend on affidavits, and the court “may” allow it
A § 604.18 claim is not assignable — which kills contractor and assignee bad-faith claims
Appraisal or arbitration extinguishes the remedy entirely — subd. 4(c)
⚡ What Minnesota GIVES
§ 604.18 — a STATUTORY first-party remedy, enacted 2008 and never amended. Heading: “Insurance Standard of Conduct”
An uncapped third-party failure-to-settle duty — Short v. Dairyland, 334 N.W.2d 384 (Minn. 1983)
Punitive damages with no cap and no split recovery. § 549.20: “clear and convincing evidence … deliberate disregard.” No share goes to the State
A defined comp bad-faith standard — “frivolously means without a good faith investigation of the facts” (§ 176.225)
Regulatory teeth aimed at the adjuster personally — $10,000 per violation
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§ 604.18 is NOT punitive damages — and calling it that is a substantive error
It is “taxable costs,” awarded by the court, not damages awarded by a jury. It is expressly in lieu of punitive damages and § 8.31 fees: “An insured may not also recover punitive or exemplary damages or attorney fees under section 8.31 for a violation of this section.”
The two-prong standard — subd. 2: “(1) the absence of a reasonable basis for denying the benefits … and (2) that the insurer knew of the lack of a reasonable basis … or acted in reckless disregard” of it. Paragraph (c) adds that an insurer does not violate it “by conducting or cooperating with a timely investigation into arson or fraud.”
The formula — subd. 3(a)(1) — is the LESSER of:
• 50% × (proceeds awarded − the insurer’s offer made at least 10 days before trial), or
• $250,000
plus attorney fees capped separately at $100,000. The absolute ceiling on a § 604.18 award is $350,000.
The strategic consequence: a pre-trial offer made at least ten days before trial is the cap-reduction lever. Offers made inside ten days do not count. Offer $600,000 against a $650,000 verdict and the award is 50% of $50,000 — $25,000. Offer nothing against a $200,000 verdict and it is $100,000.
The two-prong standard — subd. 2: “(1) the absence of a reasonable basis for denying the benefits … and (2) that the insurer knew of the lack of a reasonable basis … or acted in reckless disregard” of it. Paragraph (c) adds that an insurer does not violate it “by conducting or cooperating with a timely investigation into arson or fraud.”
The formula — subd. 3(a)(1) — is the LESSER of:
• 50% × (proceeds awarded − the insurer’s offer made at least 10 days before trial), or
• $250,000
plus attorney fees capped separately at $100,000. The absolute ceiling on a § 604.18 award is $350,000.
The strategic consequence: a pre-trial offer made at least ten days before trial is the cap-reduction lever. Offers made inside ten days do not count. Offer $600,000 against a $650,000 verdict and the award is 50% of $50,000 — $25,000. Offer nothing against a $200,000 verdict and it is $100,000.
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Peterson makes your investigation file the whole ballgame
Peterson v. Western National Mutual Insurance Co., 946 N.W.2d 903 (Minn. 2020) — the first Minnesota Supreme Court decision on § 604.18. From the syllabus:
“Minnesota Statutes § 604.18 requires an insured to prove that, after conducting a full investigation and fairly evaluating the evidence, a reasonable insurer would not have denied the insured’s claim for benefits, and the insurer knew, or recklessly disregarded information that would have allowed it to know, that it lacked a reasonable basis.”
The first prong is objective — what “a reasonable insurer under the circumstances” would have done — and the factfinder considers “the level of investigation a reasonable insurer would have conducted.”
The consequence is blunt: you cannot manufacture a reasonable basis by failing to investigate. A thin file does not produce a defensible denial; it produces the opposite. Document what you looked at, what you asked, who you spoke to, and why you concluded what you concluded.
“Minnesota Statutes § 604.18 requires an insured to prove that, after conducting a full investigation and fairly evaluating the evidence, a reasonable insurer would not have denied the insured’s claim for benefits, and the insurer knew, or recklessly disregarded information that would have allowed it to know, that it lacked a reasonable basis.”
The first prong is objective — what “a reasonable insurer under the circumstances” would have done — and the factfinder considers “the level of investigation a reasonable insurer would have conducted.”
The consequence is blunt: you cannot manufacture a reasonable basis by failing to investigate. A thin file does not produce a defensible denial; it produces the opposite. Document what you looked at, what you asked, who you spoke to, and why you concluded what you concluded.
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Appraisal and arbitration destroy the § 604.18 remedy — and Minnesota routes claims into both
Subd. 4(c) is one sentence: an award “is not available in any claim that is resolved or confirmed by arbitration or appraisal.”
Now put two other Minnesota rules beside it. Appraisal is written into the mandatory standard fire policy (§ 65A.01 subd. 3) and either party may demand it. And § 65B.525 mandates binding arbitration of no-fault, comprehensive and collision claims of $10,000 or less.
So a very large share of real Minnesota first-party claims — the property valuation dispute that goes to appraisal, the small auto claim that goes to arbitration — end in a forum that extinguishes the bad-faith remedy entirely.
Two more gates. The claim “must not” be sought in the original complaint — you sue on the contract, then move to amend with affidavits on a prima facie showing, and the court “may” allow it. Contrast § 549.191, where on a prima facie showing the court “shall” allow a punitive-damages amendment. § 604.18 is the more discretionary gate. And the claim may not be assigned.
Now put two other Minnesota rules beside it. Appraisal is written into the mandatory standard fire policy (§ 65A.01 subd. 3) and either party may demand it. And § 65B.525 mandates binding arbitration of no-fault, comprehensive and collision claims of $10,000 or less.
So a very large share of real Minnesota first-party claims — the property valuation dispute that goes to appraisal, the small auto claim that goes to arbitration — end in a forum that extinguishes the bad-faith remedy entirely.
Two more gates. The claim “must not” be sought in the original complaint — you sue on the contract, then move to amend with affidavits on a prima facie showing, and the court “may” allow it. Contrast § 549.191, where on a prima facie showing the court “shall” allow a punitive-damages amendment. § 604.18 is the more discretionary gate. And the claim may not be assigned.
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Minnesota’s bad-faith structure is the INVERSE of the national norm
| First party | Third party | |
|---|---|---|
| Common-law tort | NO | YES |
| § 604.18 statutory remedy | YES | NO — excluded by definition |
| Recovery ceiling | contract damages + capped taxable costs, ≤ $350,000 | the full excess judgment — uncapped |
Third-party failure-to-settle is a genuine common-law duty and it is uncapped. Short v. Dairyland: the insurer breaches where “the insured is clearly liable and the insurer refuses to settle within the policy limits and the decision not to settle … is not made in good faith.” Only two legitimate grounds for refusing a within-limits demand: a good-faith belief the insured is not liable, or a good-faith belief a jury would award less.
And the instruction Short gives adjusters is the memorable one — evaluate “as if there were no policy limits applicable to the claim,” giving “equal consideration to the financial exposure of the insured.”
Most national material assumes first-party bad faith is the big exposure. Here it is the small, capped one — and the uncapped exposure sits on the third-party side.
Can an adjuster be personally liable? Split answer — teach both halves.Regulatorily, yes and directly: § 72A.201 names “an adjuster” in six subdivisions, § 72B.13 imposes a duty on “every adjuster,” and § 72B.08 reaches your license plus $10,000 per violation. Civilly, it is genuinely unresolved. There is no private action under the practices act against anyone; § 604.18 runs only against “an insurer,” defined as an entity licensed under § 60A.06 — an individual adjuster is not an insurer; and there is no first-party bad-faith tort for an adjuster to commit. Note the asymmetry: § 604.18 subd. 5 immunizes producers, not adjusters — the legislature limited producer liability expressly and said nothing about adjusters. No Minnesota appellate decision squarely decides it. Do not assume immunity and do not assume liability — but know that your real, everyday exposure here is regulatory.
Minnesota is one of the minority of states with real numeric claim-handling deadlines in statute — and the unit of time is not consistent within the statute.
Business days. Working days. Calendar days. Years. The inconsistency is itself testable. Read the unit before you count.
Business days. Working days. Calendar days. Years. The inconsistency is itself testable. Read the unit before you count.
| Deadline | Unit | What starts the clock | Cite |
|---|---|---|---|
| 10 | business days | Receipt of notification of claim — acknowledge and provide all necessary claim forms and instructions | subd. 4(1) |
| 10 | business days | Any other communication reasonably indicating a response is needed | subd. 4(2) |
| 30 | business days | Receipt of notification of claim — complete the investigation and advise acceptance or denial | subd. 4(3)(i) |
| 60 | business days | Receipt of a properly executed proof of loss — advise acceptance or denial | subd. 4(11) |
| 5 | business days | Later of receipt of the settlement agreement or the claimant’s performance of a condition — issue payment | subd. 5(5) |
| 60 | calendar days | Before a statute of limitations expires — written warning to an unrepresented insured or claimant | subd. 4(8) |
| 5 / 15 | business days / days | Inspect auto damage before repair — 5 business days if the vehicle cannot be safely driven, 15 days otherwise | subd. 6(3) |
| 15 | working days | An inquiry from the Commissioner about a claim | subd. 9(1) |
| 30 | calendar days | Written request by a claimant — disclose policy coverage and limits | subd. 11 |
| 10 | business days | Written request by an insured for a copy of the claim file (§ 65B.44 benefits) | subd. 6(13) |
| 4 | years | Complaint file retention | subd. 9(5) |
business days — the default unit in subds. 4 and 5calendar days, working days, or years — read carefully
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There are TWO accept-or-deny clocks, not one — and the 30-day clock has two escape hatches
Clock one — subd. 4(3)(i), 30 business days from notification of claim:
“unless provided otherwise by clause (ii) or (iii), other law, or in the policy, failing to complete its investigation and inform the insured or claimant of acceptance or denial of a claim within 30 business days after receipt of notification of claim unless the investigation cannot be reasonably completed within that time. In the event that the investigation cannot reasonably be completed within that time, the insurer shall notify the insured or claimant within the time period of the reasons why the investigation is not complete and the expected date the investigation will be complete.”
Two qualifiers most guides drop: the deadline yields to contrary policy language, and it is excused where the investigation cannot reasonably be completed — but only if you send a reasons-plus-expected-date notice inside the 30 business days. Missing that status letter is itself the violation.
Clock two — subd. 4(11), 60 business days from receipt of a properly executed proof of loss:
“No insurer shall deny a claim on the grounds of a specific policy provision, condition, or exclusion unless reference to the provision, condition, or exclusion is included in the denial. The denial must be given to the insured in writing with a copy filed in the claim file.”
Study guides almost always report only the first. They are separate obligations with separate triggers, and the second carries a drafting rule about what a denial letter must contain.
A fraud carve-out softens the explanation duty — subd. 4(4): where evidence of suspected fraud is present, the reasons “need not be specific” — but the evidence must be made available to Commerce on request.
And one scope limit — subd. 10: “This section does not apply to workers’ compensation insurance. Nothing in this section abrogates any policy provisions.”
“unless provided otherwise by clause (ii) or (iii), other law, or in the policy, failing to complete its investigation and inform the insured or claimant of acceptance or denial of a claim within 30 business days after receipt of notification of claim unless the investigation cannot be reasonably completed within that time. In the event that the investigation cannot reasonably be completed within that time, the insurer shall notify the insured or claimant within the time period of the reasons why the investigation is not complete and the expected date the investigation will be complete.”
Two qualifiers most guides drop: the deadline yields to contrary policy language, and it is excused where the investigation cannot reasonably be completed — but only if you send a reasons-plus-expected-date notice inside the 30 business days. Missing that status letter is itself the violation.
Clock two — subd. 4(11), 60 business days from receipt of a properly executed proof of loss:
“No insurer shall deny a claim on the grounds of a specific policy provision, condition, or exclusion unless reference to the provision, condition, or exclusion is included in the denial. The denial must be given to the insured in writing with a copy filed in the claim file.”
Study guides almost always report only the first. They are separate obligations with separate triggers, and the second carries a drafting rule about what a denial letter must contain.
A fraud carve-out softens the explanation duty — subd. 4(4): where evidence of suspected fraud is present, the reasons “need not be specific” — but the evidence must be made available to Commerce on request.
And one scope limit — subd. 10: “This section does not apply to workers’ compensation insurance. Nothing in this section abrogates any policy provisions.”
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The acknowledgment has content requirements — and an oral one must be papered
Subd. 4(1) is not satisfied by silence-plus-a-letter-later. The acknowledgment “must include the telephone number of the company representative who can assist the insured or the claimant,” and the same clause requires you to “promptly provide all necessary claim forms and instructions” — unless the claim is settled within ten business days, which is the only exit.
If you acknowledge by telephone, the file must record five things: “the telephone number called … the name of the person making the telephone call … the name of the person who actually received the telephone call … the time … and the date.”
An undocumented call is, for enforcement purposes, a call that did not happen.
If you acknowledge by telephone, the file must record five things: “the telephone number called … the name of the person making the telephone call … the name of the person who actually received the telephone call … the time … and the date.”
An undocumented call is, for enforcement purposes, a call that did not happen.
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The homeowner’s proof-of-loss rule overrides the standard fire policy — and it cuts both ways
§ 65A.296 is a homeowner’s-specific overlay, and subd. 4 says so expressly: “This section supersedes any inconsistent provision of section 65A.01, 72A.201, or other law.”
Subd. 1: after written notice of a claim the insurer may notify the insured of the 60-day proof-of-loss deadline — but the notice must go by certified mail, return receipt requested, and must include the proof-of-loss form and instructions meeting chapter 72C readability standards.
Subd. 2 is the consequence, and it is symmetrical:
• failure to meet the 60-day requirement bars recovery IF the insurer’s notice was received, unless the insured shows good cause;
• it does NOT bar recovery if the notice was not received, unless the insurer demonstrates prejudice.
Practical translation: on a Minnesota homeowner’s claim, the 60-day proof-of-loss clock is enforceable against the insured only if you sent the certified-mail notice with the form. If you did not, you must prove prejudice. An adjuster who denies for a late proof of loss without having sent that notice is standing on nothing.
Subd. 1: after written notice of a claim the insurer may notify the insured of the 60-day proof-of-loss deadline — but the notice must go by certified mail, return receipt requested, and must include the proof-of-loss form and instructions meeting chapter 72C readability standards.
Subd. 2 is the consequence, and it is symmetrical:
• failure to meet the 60-day requirement bars recovery IF the insurer’s notice was received, unless the insured shows good cause;
• it does NOT bar recovery if the notice was not received, unless the insurer demonstrates prejudice.
Practical translation: on a Minnesota homeowner’s claim, the 60-day proof-of-loss clock is enforceable against the insured only if you sent the certified-mail notice with the form. If you did not, you must prove prejudice. An adjuster who denies for a late proof of loss without having sent that notice is standing on nothing.
| Clock outside § 72A.201 | Period | Cite |
|---|---|---|
| No-fault (PIP) benefits overdue | 30 days after reasonable proof of the fact and amount of loss | § 65B.54 subd. 1 |
| Interest on overdue PIP | 15% per annum, simple | § 65B.54 subd. 2 |
| Health plan clean claim | 30 calendar days, then 1.5% per month | § 62Q.75 subd. 2 |
| Standard fire policy — time to pay | 60 days after proof of loss and ascertainment of loss | § 65A.01 subd. 3 |
| Standard fire policy — insured’s proof of loss | 60 days, sworn and in writing | § 65A.01 subd. 3 |
| Mandatory no-fault / collision arbitration | claims of $10,000 or less | § 65B.525 subd. 1 |
a dollar threshold, not a clockthese are CALENDAR days — unlike § 72A.201
The PIP accumulation option most guides omit§ 65B.54 subd. 1, verbatim: “Benefits are overdue if not paid within 30 days after the reparation obligor receives reasonable proof of the fact and amount of loss realized, unless the reparation obligor elects to accumulate claims for periods not exceeding 31 days and pays them within 15 days after the period of accumulation.” That second clause is a real, elective alternative schedule — and it is why a payment issued on day 40 is not automatically overdue. Ask which schedule the carrier elected before you concede a violation.
A no-fault auto system, a real valued policy law, appraisers who may decide causation, and an injured employee who picks the doctor.
This cluster is where the national assumptions break hardest. Four of them are outright reversed here.
This cluster is where the national assumptions break hardest. Four of them are outright reversed here.
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Minnesota’s no-fault default is YOUR OWN policy first — not the vehicle you were riding in
This is the single most consequential departure from the vehicle-first rule.
§ 65B.47 subd. 4 — the general rule: “In all other cases … (a) The security for payment of basic economic loss benefits applicable to injury to an insured is the security under which the injured person is an insured. (b) The security … applicable to injury to the driver or other occupant of an involved motor vehicle who is not an insured is the security covering that vehicle.”
So a passenger in a friend’s car who is an “insured” under their own or a household policy claims PIP from their own policy, not from the car they were riding in.
The vehicle-first rule survives only as an exception, in two situations: subd. 1, a vehicle “being used in the business of transporting persons or property” (with six carve-outs in subd. 1a — commuter vans, day-care and school transport, buses as to Minnesota-resident insureds, taxi passengers), and subd. 2, injury while occupying a vehicle “furnished by the employer.”
Who is an “insured” — § 65B.43 subd. 5: the named insured plus, while “residing in the same household” and not named on another qualifying policy, a spouse, another relative, or a minor in the custody of a named insured or resident relative.
Anti-stacking with an election — subd. 7: “Unless a policyholder makes a specific election to have two or more policies added together” the limits may not be combined — and “An insurer shall notify policyholders that they may elect.”
§ 65B.47 subd. 4 — the general rule: “In all other cases … (a) The security for payment of basic economic loss benefits applicable to injury to an insured is the security under which the injured person is an insured. (b) The security … applicable to injury to the driver or other occupant of an involved motor vehicle who is not an insured is the security covering that vehicle.”
So a passenger in a friend’s car who is an “insured” under their own or a household policy claims PIP from their own policy, not from the car they were riding in.
The vehicle-first rule survives only as an exception, in two situations: subd. 1, a vehicle “being used in the business of transporting persons or property” (with six carve-outs in subd. 1a — commuter vans, day-care and school transport, buses as to Minnesota-resident insureds, taxi passengers), and subd. 2, injury while occupying a vehicle “furnished by the employer.”
Who is an “insured” — § 65B.43 subd. 5: the named insured plus, while “residing in the same household” and not named on another qualifying policy, a spouse, another relative, or a minor in the custody of a named insured or resident relative.
Anti-stacking with an election — subd. 7: “Unless a policyholder makes a specific election to have two or more policies added together” the limits may not be combined — and “An insurer shall notify policyholders that they may elect.”
| Basic economic loss benefits — § 65B.44 | Limit |
|---|---|
| Total per person | $40,000 — $20,000 medical plus $20,000 everything else |
| Income loss / disability | 85% of gross income, max $500 per week |
| Replacement services | max $200 per week; day of injury and first seven days excluded |
| Funeral / burial | not in excess of $5,000 |
| Survivor’s economic loss | death within one year; max $500 per week |
| Survivor’s replacement services | max $200 per week |
| Property damage | NOT included — subd. 8 excludes it expressly |
| Minimum liability limits — § 65B.49 subd. 3 | 30 / 60 / 10 |
| Mandatory UM and UIM — subd. 3a | 25 / 50 each — provided and maintained, not merely offered |
the full mandatory package: PIP $40,000 + 30/60/10 + UM 25/50 + UIM 25/50none of these figures has been indexed since 2015
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The two $20,000 buckets are NOT interchangeable — and the weekly maximums may not be prorated
$40,000 is the total, but it is $20,000 medical plus $20,000 for income loss, replacement services, funeral and survivor’s benefits. An insured who exhausts the medical bucket cannot reach across into the other, and vice versa.
Subd. 3(d), verbatim: “The weekly maximums may not be prorated to arrive at a daily maximum, even if the injured person does not incur loss of income for a full week.” Two days off does not mean two-fifths of $500.
Subd. 3(e) counts treatment time as lost time: an injured person unable to work includes one who “misses time from work, including reasonable travel time, and loses income, vacation, or sick leave benefits, to obtain medical treatment.”
And UM and UIM are MANDATORY here, not “must offer.” § 65B.49 subd. 3a(1): “No plan of reparation security may be renewed, delivered or issued for delivery … unless separate uninsured and underinsured motorist coverages are provided.” And subd. 3a(2): “Every owner … shall maintain” them. A course describing a rejectable written offer is describing a different state.
Subd. 3(d), verbatim: “The weekly maximums may not be prorated to arrive at a daily maximum, even if the injured person does not incur loss of income for a full week.” Two days off does not mean two-fifths of $500.
Subd. 3(e) counts treatment time as lost time: an injured person unable to work includes one who “misses time from work, including reasonable travel time, and loses income, vacation, or sick leave benefits, to obtain medical treatment.”
And UM and UIM are MANDATORY here, not “must offer.” § 65B.49 subd. 3a(1): “No plan of reparation security may be renewed, delivered or issued for delivery … unless separate uninsured and underinsured motorist coverages are provided.” And subd. 3a(2): “Every owner … shall maintain” them. A course describing a rejectable written offer is describing a different state.
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The $4,000 tort threshold is a NET figure — an adjuster who totals the bills will overstate it
§ 65B.51 subd. 3 gates noneconomic damages. Any one of five prongs opens the door: the medical sum exceeds $4,000; or the injury results in permanent disfigurement, permanent injury, death, or disability for 60 days or more.
Read subd. 3(a) as arithmetic: add (1) medical expense benefits paid, payable or payable but for a deductible, (2) the value of free medical or nursing care by a relative, and (3) the undercharge adjustment — then SUBTRACT (4) amounts for diagnostic x-rays and for procedures or treatment for rehabilitation and not for remedial purposes.
A claimant with $4,500 in bills of which $900 is diagnostic imaging and rehabilitation-only treatment is at $3,600 net — under the threshold. And the statute says “exceeds $4,000”: exactly $4,000 does not clear it. Neither the $4,000 nor the 60-day figure has been amended since 1990.
“Disability” is defined: the “inability to engage in substantially all of the injured person’s usual and customary daily activities” — not inability to work.
The threshold does NOT gate economic damages. Excess wage loss above the $500 weekly cap, or medical above the $20,000 bucket, is recoverable in tort with no threshold showing at all (subd. 2).
Read subd. 3(a) as arithmetic: add (1) medical expense benefits paid, payable or payable but for a deductible, (2) the value of free medical or nursing care by a relative, and (3) the undercharge adjustment — then SUBTRACT (4) amounts for diagnostic x-rays and for procedures or treatment for rehabilitation and not for remedial purposes.
A claimant with $4,500 in bills of which $900 is diagnostic imaging and rehabilitation-only treatment is at $3,600 net — under the threshold. And the statute says “exceeds $4,000”: exactly $4,000 does not clear it. Neither the $4,000 nor the 60-day figure has been amended since 1990.
“Disability” is defined: the “inability to engage in substantially all of the injured person’s usual and customary daily activities” — not inability to work.
The threshold does NOT gate economic damages. Excess wage loss above the $500 weekly cap, or medical above the $20,000 bucket, is recoverable in tort with no threshold showing at all (subd. 2).
Order of operations — and many national courses reverse it§ 65B.51 subd. 1: “the court shall deduct from any recovery the value of basic or optional economic loss benefits paid or payable … In any case where the claimant is found to be at fault under section 604.01, the deduction for basic economic loss benefits must be made BEFORE the claimant’s damages are reduced under section 604.01, subdivision 1.” So: (1) gross damages → (2) subtract PIP → (3) then apply the comparative fault reduction. Doing it the other way round produces a different — and wrong — net number.
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UIM is ADD-ON, not difference-in-limits — and the leading case says the opposite of the current statute
Broton v. Western National Mutual Insurance Co., 428 N.W.2d 85 (Minn. 1988) construed the 1985 version of § 65B.49 subd. 4a and adopted a difference-in-limits rule. The legislature then overruled it — Laws 1989, ch. 213, § 2 struck the clause, effective August 1, 1989.
Current subd. 4a: the maximum liability is “the amount of damages sustained but not recovered from the insurance policy of the driver or owner of any underinsured at fault vehicle … However, in no event shall the underinsured motorist carrier have to pay more than the amount of its underinsured motorist limits.”
Worked example. Damages $200,000. Tortfeasor’s limit $50,000, paid in full. Insured’s UIM limit $100,000.
• Minnesota (add-on): $150,000 not recovered, capped at the $100,000 limit → UIM pays $100,000. Total $150,000.
• A difference-in-limits state: $100,000 − $50,000 = $50,000. Total $100,000.
Cite Neuman v. State Farm, 492 N.W.2d 530 (Minn. 1992) for the modern rule. Any material citing Broton as current law on the calculation is teaching pre-1989 law.
And “underinsured” here is defined by DAMAGES, not by comparing limits. § 65B.43 subd. 17: a vehicle whose “limit for bodily injury liability is less than the amount needed to compensate the insured for actual damages.” A tortfeasor carrying limits higher than your insured’s UIM limit can still be underinsured here. Both the UM and UIM definitions expressly include motorcycles.
Current subd. 4a: the maximum liability is “the amount of damages sustained but not recovered from the insurance policy of the driver or owner of any underinsured at fault vehicle … However, in no event shall the underinsured motorist carrier have to pay more than the amount of its underinsured motorist limits.”
Worked example. Damages $200,000. Tortfeasor’s limit $50,000, paid in full. Insured’s UIM limit $100,000.
• Minnesota (add-on): $150,000 not recovered, capped at the $100,000 limit → UIM pays $100,000. Total $150,000.
• A difference-in-limits state: $100,000 − $50,000 = $50,000. Total $100,000.
Cite Neuman v. State Farm, 492 N.W.2d 530 (Minn. 1992) for the modern rule. Any material citing Broton as current law on the calculation is teaching pre-1989 law.
And “underinsured” here is defined by DAMAGES, not by comparing limits. § 65B.43 subd. 17: a vehicle whose “limit for bodily injury liability is less than the amount needed to compensate the insured for actual damages.” A tortfeasor carrying limits higher than your insured’s UIM limit can still be underinsured here. Both the UM and UIM definitions expressly include motorcycles.
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The Schmidt v. Clothier notice — 30 days, in writing, BEFORE the release
Schmidt v. Clothier, 338 N.W.2d 256 (Minn. 1983) created a procedure that exists in no other state in this exact form: “30 days from the written notice of the tentative settlement agreement is a more reasonable time period.”
The steps:
1. The claimant reaches a tentative settlement with the tortfeasor’s liability carrier. Do not sign a release.
2. Serve written notice of the tentative settlement on the UIM carrier, stating amount and terms.
3. Wait 30 days.
4. Within that window the UIM carrier may substitute its own draft for the settlement amount — preserving its subrogation rights against the tortfeasor while the insured receives the same dollars.
5. If it does not substitute, the claimant may release the tortfeasor and pursue UIM.
Get it wrong and the claim is forfeit. Later courts hold that release of the tortfeasor “creates a rebuttable presumption that the underinsurer has been prejudiced” and “the burden of demonstrating … the absence of prejudice shall be borne by the insured.” The remedy for failure is forfeiture of the right of action against the underinsurer.
And the notice must PRECEDE the release. Notice delivered after a release has been executed is insufficient.
The steps:
1. The claimant reaches a tentative settlement with the tortfeasor’s liability carrier. Do not sign a release.
2. Serve written notice of the tentative settlement on the UIM carrier, stating amount and terms.
3. Wait 30 days.
4. Within that window the UIM carrier may substitute its own draft for the settlement amount — preserving its subrogation rights against the tortfeasor while the insured receives the same dollars.
5. If it does not substitute, the claimant may release the tortfeasor and pursue UIM.
Get it wrong and the claim is forfeit. Later courts hold that release of the tortfeasor “creates a rebuttable presumption that the underinsurer has been prejudiced” and “the burden of demonstrating … the absence of prejudice shall be borne by the insured.” The remedy for failure is forfeiture of the right of action against the underinsurer.
And the notice must PRECEDE the release. Notice delivered after a release has been executed is insufficient.
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Minnesota does NOT aggregate defendants’ fault — the plaintiff is compared to EACH defendant individually
§ 604.01 subd. 1 bars recovery unless the plaintiff’s fault “was not greater than the fault of the person against whom recovery is sought” — a 51% bar, and note the singular noun. A plaintiff at exactly 50% recovers, halved; at 51% recovers nothing.
The case law means the singular. Marier v. Memorial Rescue Service, Inc., 207 N.W.2d 706 (Minn. 1973) — plaintiff 33⅓%, each of two defendants 33⅓%: “his negligence must not be as great as the negligence of the defendant against whom he seeks recovery.” The plaintiff recovered nothing, though the defendants’ combined fault was double his. Cambern v. Sioux Tools, 323 N.W.2d 795 (Minn. 1982): “Absent proof of an economic joint venture, current Minnesota law is clear that defendants’ fault is not to be aggregated.”
Worked example. Claimant 40% at fault. Three defendants at 25%, 20% and 15%. Against the aggregate 60% the claimant recovers. Compared individually — 40 against 25, 40 against 20, 40 against 15 — the claimant recovers nothing from anyone.
The only exception is a joint enterprise or economic joint venture (Krengel v. Midwest Automatic Photo, 203 N.W.2d 841 (Minn. 1973)), requiring contribution of money, time, property or skill; joint proprietorship and control; sharing of profits; and a contract. Mere concurrent negligence does not qualify.
Joint and several liability — § 604.02 subd. 1. Several only, except a person whose fault is greater than 50 percent, two or more acting in a common scheme or plan, a person committing an intentional tort, and certain environmental defendants. A defendant at 50% or less pays only its several share.
The case law means the singular. Marier v. Memorial Rescue Service, Inc., 207 N.W.2d 706 (Minn. 1973) — plaintiff 33⅓%, each of two defendants 33⅓%: “his negligence must not be as great as the negligence of the defendant against whom he seeks recovery.” The plaintiff recovered nothing, though the defendants’ combined fault was double his. Cambern v. Sioux Tools, 323 N.W.2d 795 (Minn. 1982): “Absent proof of an economic joint venture, current Minnesota law is clear that defendants’ fault is not to be aggregated.”
Worked example. Claimant 40% at fault. Three defendants at 25%, 20% and 15%. Against the aggregate 60% the claimant recovers. Compared individually — 40 against 25, 40 against 20, 40 against 15 — the claimant recovers nothing from anyone.
The only exception is a joint enterprise or economic joint venture (Krengel v. Midwest Automatic Photo, 203 N.W.2d 841 (Minn. 1973)), requiring contribution of money, time, property or skill; joint proprietorship and control; sharing of profits; and a contract. Mere concurrent negligence does not qualify.
Joint and several liability — § 604.02 subd. 1. Several only, except a person whose fault is greater than 50 percent, two or more acting in a common scheme or plan, a person committing an intentional tort, and certain environmental defendants. A defendant at 50% or less pays only its several share.
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Anti-steering is prohibited in four places — and it comes with a script you must read aloud
Steering is banned in § 72B.091 subd. 3 (“No appraiser, adjuster, or that person’s employer shall require that repairs be made in any specified repair facility”), in § 72B.092 subd. 1(1)–(4) and (6), and in § 72A.201 subd. 6(7).
§ 72A.201 subd. 6(7) supplies the words:
“You have the legal right to choose a repair shop to fix your vehicle. Your policy will cover the reasonable costs of repairing your vehicle to its pre-accident condition no matter where you have repairs made. Have you selected a repair shop or would you like a referral?”
and the rule that follows: “After an insured has indicated that the insured has selected a repair shop, the insurer must cease all efforts to influence the insured’s or claimant’s choice of repair shop.”
Two more scripted advisories. Glass, subd. 6(16): “Minnesota law gives you the right to go to any glass vendor you choose, and prohibits me from pressuring you to choose a particular vendor” — and a warranty is not an inducement. Rental, subd. 6(17): “Minnesota law gives you the right to choose any rental vehicle company, and prohibits me from requiring you to choose a particular vendor.”
Non-OEM parts: § 72B.091 subd. 2 requires disclosure of “any parts to be used, other than window glass, which are not original equipment parts”; § 72A.201 subd. 6(7) forbids requiring non-OEM parts as a condition of payment — again other than window glass. Glass is carved out of both, then given its own protective regime.
§ 72A.201 subd. 6(7) supplies the words:
“You have the legal right to choose a repair shop to fix your vehicle. Your policy will cover the reasonable costs of repairing your vehicle to its pre-accident condition no matter where you have repairs made. Have you selected a repair shop or would you like a referral?”
and the rule that follows: “After an insured has indicated that the insured has selected a repair shop, the insurer must cease all efforts to influence the insured’s or claimant’s choice of repair shop.”
Two more scripted advisories. Glass, subd. 6(16): “Minnesota law gives you the right to go to any glass vendor you choose, and prohibits me from pressuring you to choose a particular vendor” — and a warranty is not an inducement. Rental, subd. 6(17): “Minnesota law gives you the right to choose any rental vehicle company, and prohibits me from requiring you to choose a particular vendor.”
Non-OEM parts: § 72B.091 subd. 2 requires disclosure of “any parts to be used, other than window glass, which are not original equipment parts”; § 72A.201 subd. 6(7) forbids requiring non-OEM parts as a condition of payment — again other than window glass. Glass is carved out of both, then given its own protective regime.
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You may not desk-adjust a disputed shop estimate
§ 72B.092 subd. 1(5) forbids an adjuster to “adjust a damage appraisal of a repair shop when the extent of damage is in dispute without conducting a physical inspection of the vehicle.”
If the shop’s estimate and yours diverge on how much damage there is, reviewing photographs from your desk and writing the estimate down is a statutory violation. Go look at the car.
Clause (7) is the modern companion: no “unilaterally and arbitrarily disregard[ing] a repair operation or cost identified by an estimating system, which an insurer and collision repair facility have agreed to utilize.” Line-item deletion from an agreed platform is prohibited.
§ 72B.091 adds four more duties: carry and display appraiser identification on request; give the owner a legible copy of the appraisal; itemize parts repaired versus replaced “by new, used, rebuilt, reconditioned or replated parts” and note “all significant old and unrelated damages”; promptly reinspect when supplements are requested or the extent of damage is disputed. And subd. 5: no adjuster may, for personal gain, receive or trade in salvage obtained through their own appraisals.
If the shop’s estimate and yours diverge on how much damage there is, reviewing photographs from your desk and writing the estimate down is a statutory violation. Go look at the car.
Clause (7) is the modern companion: no “unilaterally and arbitrarily disregard[ing] a repair operation or cost identified by an estimating system, which an insurer and collision repair facility have agreed to utilize.” Line-item deletion from an agreed platform is prohibited.
§ 72B.091 adds four more duties: carry and display appraiser identification on request; give the owner a legible copy of the appraisal; itemize parts repaired versus replaced “by new, used, rebuilt, reconditioned or replated parts” and note “all significant old and unrelated damages”; promptly reinspect when supplements are requested or the extent of damage is disputed. And subd. 5: no adjuster may, for personal gain, receive or trade in salvage obtained through their own appraisals.
The 80% salvage figure is a TITLING rule — and the definition is disjunctive§ 168A.01 subd. 17b: a salvage vehicle is one “(1) for which an insurance company has declared a total loss or paid a total loss claim, or (2) that has been involved in a collision … in which the cost of repairs exceeds 80 percent of the value of the vehicle immediately before the damage.” Read the “or”: your own total-loss declaration brands the vehicle at ANY percentage. You cannot avoid the salvage brand by settling below 80%. Nothing in chapter 168A tells an insurer when to declare a total loss. § 168A.151 subd. 1 then requires the insurer to “immediately” apply for a “salvage” brand (late-model or high-value vehicles) or “prior salvage” (everything else), and to notify the department within ten days of obtaining title through payment. A late-model vehicle is within the fifth preceding model year; a high-value vehicle has a pre-damage ACV “in excess of $9,000.”
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Minnesota mandates a standard fire policy — and everything else is an endorsement
§ 65A.01 subd. 1: “No policy or contract of fire insurance shall be made, issued or delivered … on any property in this state, unless it shall provide the specified coverage and conform as to all provisions, stipulations, and conditions” with the Minnesota standard fire insurance policy.
The statutory perils — subd. 3: “all loss or damage by fire originating from any cause … also any damage by lightning and by removal from premises endangered by the perils insured against” — removal running “pro rata for five days.” Wind, hail, water and theft are added perils attached by endorsement under subd. 4.
The conditions an adjuster must know, all from subd. 3: vacancy voids coverage beyond 60 consecutive days · “immediate written notice” of loss · sworn proof of loss within 60 days · loss payable 60 days after proof of loss AND ascertainment · appraisal on written demand of either party, appraisers named in 20 days, umpire agreed in 15 days, judge may appoint on 5 days’ notice, and “an award … of any two” determines the amount · suit within two years after inception of the loss · the company’s option to repair, noticed within 30 days of proof of loss · insured cancels = short rate, company cancels = pro rata.
Also written in: no abandonment, pro rata liability across other insurance, subrogation, assignment only by written consent, and a mortgagee clause that — distinctively — also protects a contract-for-deed vendor. § 65A.01 subd. 3b limits rescission to concealment or misrepresentation “willfully and with intent to defraud,” and rescission “must not operate to defeat a claim by a third party or a minor child.”
The statutory perils — subd. 3: “all loss or damage by fire originating from any cause … also any damage by lightning and by removal from premises endangered by the perils insured against” — removal running “pro rata for five days.” Wind, hail, water and theft are added perils attached by endorsement under subd. 4.
The conditions an adjuster must know, all from subd. 3: vacancy voids coverage beyond 60 consecutive days · “immediate written notice” of loss · sworn proof of loss within 60 days · loss payable 60 days after proof of loss AND ascertainment · appraisal on written demand of either party, appraisers named in 20 days, umpire agreed in 15 days, judge may appoint on 5 days’ notice, and “an award … of any two” determines the amount · suit within two years after inception of the loss · the company’s option to repair, noticed within 30 days of proof of loss · insured cancels = short rate, company cancels = pro rata.
Also written in: no abandonment, pro rata liability across other insurance, subrogation, assignment only by written consent, and a mortgagee clause that — distinctively — also protects a contract-for-deed vendor. § 65A.01 subd. 3b limits rescission to concealment or misrepresentation “willfully and with intent to defraud,” and rescission “must not operate to defeat a claim by a third party or a minor child.”
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Minnesota HAS a valued policy law — the burden sits on the INSURER, and appraisal is unavailable
§ 65A.08 subd. 2(a): “In the absence of any change increasing the risk, without the consent of the insurer, of which the burden of proof shall be upon it, and in the absence of intentional fraud on the part of the insured, the insurer shall pay the whole amount mentioned in the policy … in case of total loss, and in case of partial loss, the full amount thereof.”
On a total loss the insurer owes the FULL POLICY FACE AMOUNT. There is no valuation argument to be had. Only two conditions defeat it, and on the first the insurer carries the burden.
Read the partial-loss clause carefully. “[A]nd in case of partial loss, the full amount thereof” means the full amount of the loss, not the policy limit. It is not a valued-policy rule for partial losses.
Reinforcing provisions: § 65A.01 subd. 5 forbids any provision “limiting the amount to be paid in case of total loss on buildings … to less than the amount of insurance”; § 65A.04 protects § 65A.08 from being read down by the rest of the chapter. The FAIR Plan is the one carve-out — subd. 2(b) lets it contest value only by proving by clear and convincing evidence that the value was less, and refunding the premium.
And appraisal is unavailable on a building total loss — the standard-form clause applies “except in case of total loss on buildings.” An insurer cannot force appraisal to work around a valued-policy claim. Who decides whether a loss is total? The court — Auto-Owners Insurance Co. v. Second Chance Investments, LLC (Minn. 2013): “the district court is the appropriate forum to resolve their dispute.”
One caution: § 65A.08 subd. 2 names no peril on its face. It sits in chapter 65A and the reported cases apply it to fire. Treat it as a fire and lightning valued policy law — there is no authority extending it further, and none saying it stops there either.
On a total loss the insurer owes the FULL POLICY FACE AMOUNT. There is no valuation argument to be had. Only two conditions defeat it, and on the first the insurer carries the burden.
Read the partial-loss clause carefully. “[A]nd in case of partial loss, the full amount thereof” means the full amount of the loss, not the policy limit. It is not a valued-policy rule for partial losses.
Reinforcing provisions: § 65A.01 subd. 5 forbids any provision “limiting the amount to be paid in case of total loss on buildings … to less than the amount of insurance”; § 65A.04 protects § 65A.08 from being read down by the rest of the chapter. The FAIR Plan is the one carve-out — subd. 2(b) lets it contest value only by proving by clear and convincing evidence that the value was less, and refunding the premium.
And appraisal is unavailable on a building total loss — the standard-form clause applies “except in case of total loss on buildings.” An insurer cannot force appraisal to work around a valued-policy claim. Who decides whether a loss is total? The court — Auto-Owners Insurance Co. v. Second Chance Investments, LLC (Minn. 2013): “the district court is the appropriate forum to resolve their dispute.”
One caution: § 65A.08 subd. 2 names no peril on its face. It sits in chapter 65A and the reported cases apply it to fire. Treat it as a fire and lightning valued policy law — there is no authority extending it further, and none saying it stops there either.
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In Minnesota, appraisers MAY decide causation — a minority rule
Quade v. Secura Insurance, 814 N.W.2d 703 (Minn. 2012):
“in the insurance context, an appraiser’s assessment of the ‘amount of loss’ necessarily includes a determination of the cause of the loss”
“The Quades are incorrect that appraisers can never allocate damages between covered and excluded perils.”
“Coverage questions, such as whether damage is excluded because it was not caused by wind, are legal questions for the court.”
The line runs between causation and allocation (appraisers may) and coverage and policy interpretation (the court decides). Many states confine appraisers strictly to a dollar figure and forbid any causation finding. Minnesota does not — and an adjuster who assumes the narrow rule will mishandle the scope of an appraisal demand here.
Labor depreciation — permissible, not mandatory. Wilcox v. State Farm Fire & Casualty Co., 874 N.W.2d 780 (Minn. 2016): where the policy does not define actual cash value, the trier of fact “may consider embedded-labor-cost depreciation” — but it is “only one of many factors” under the broad evidence rule. The Court declined to announce a categorical rule either way.
Matching is CONTRACTUAL, not statutory. There is no Minnesota matching statute. Cedar Bluff Townhome Condominium Ass’n v. American Family, 857 N.W.2d 290 (Minn. 2014) construed “comparable material and quality” to require “a reasonable color match” — “something less than an identical color match, but a reasonable color match nonetheless.” But insurers drafted around it: Noonan v. American Family, 924 F.3d 1026 (8th Cir. 2019) enforced an express matching exclusion. Read the form before you promise a match.
“in the insurance context, an appraiser’s assessment of the ‘amount of loss’ necessarily includes a determination of the cause of the loss”
“The Quades are incorrect that appraisers can never allocate damages between covered and excluded perils.”
“Coverage questions, such as whether damage is excluded because it was not caused by wind, are legal questions for the court.”
The line runs between causation and allocation (appraisers may) and coverage and policy interpretation (the court decides). Many states confine appraisers strictly to a dollar figure and forbid any causation finding. Minnesota does not — and an adjuster who assumes the narrow rule will mishandle the scope of an appraisal demand here.
Labor depreciation — permissible, not mandatory. Wilcox v. State Farm Fire & Casualty Co., 874 N.W.2d 780 (Minn. 2016): where the policy does not define actual cash value, the trier of fact “may consider embedded-labor-cost depreciation” — but it is “only one of many factors” under the broad evidence rule. The Court declined to announce a categorical rule either way.
Matching is CONTRACTUAL, not statutory. There is no Minnesota matching statute. Cedar Bluff Townhome Condominium Ass’n v. American Family, 857 N.W.2d 290 (Minn. 2014) construed “comparable material and quality” to require “a reasonable color match” — “something less than an identical color match, but a reasonable color match nonetheless.” But insurers drafted around it: Noonan v. American Family, 924 F.3d 1026 (8th Cir. 2019) enforced an express matching exclusion. Read the form before you promise a match.
59 days, 60 days, 90 days — conflating them is the classic Minnesota errorResidential property: after 60 days in effect or on renewal, cancellation is limited to five stated reasons; notice is 20 days for a policy under 60 days old or for nonpayment, 30 days midterm, 60 days nonrenewal. And § 65A.29 subd. 13 requires the capitalized warning that the insurer “MAY ELECT TO CANCEL COVERAGE AT ANY TIME DURING THE FIRST 59 DAYS” for any reason not prohibited by statute. Commercial P&C (§§ 60A.35–60A.37): eight grounds, 60 days’ notice, 10 days for nonpayment, and policies in effect 90 days or less may be canceled for any lawful reason on 10 days’ notice. Personal auto (§§ 65B.14–65B.21): eight enumerated reasons — but § 65B.15 subd. 2 switches the protection off for a policy in effect less than 60 days “unless it is a renewal policy.” A renewal is protected from day one. An underwriter or adjuster who treats a renewal like new business will cancel unlawfully. Nonrenewal is 60 days across all three.
💳 Guaranty Association — ch. 60C
$300,000 per covered claim — § 60C.09 subd. 3 — plus a $10,000,000 aggregate per insured and affiliates (subd. 4)
There is NO $100 deductible. The NAIC model limits the association to amounts “in excess of one hundred dollars”; Minnesota contains no floor at all. It pays from the first dollar
Unearned premium is NOT capped at $10,000. Most states cap it there. Minnesota lets it ride the full $300,000
Workers’ compensation is uncapped TWICE — exempt from the $300,000 per-claim cap and from the $10,000,000 aggregate. The only line with special treatment
The only deductible language runs the other way: subd. 2(4) excludes the portion within the insured’s own policy deductible, and subd. 3 states “no deductible applies” to assigned-claims-plan claims
🚫 Fraud — and the bureau that no longer exists
The Commerce Fraud Bureau was abolished in 2025. § 45.0135 subd. 2a — the subdivision that created it — was repealed by 2025 c 35, art. 3, s. 25. Almost every published reference predates this
The successor is the Financial Crimes and Fraud Section of the Bureau of Criminal Apprehension — § 299C.061. Report to the BCA
Commerce handles CIVIL and administrative fraud; the BCA handles CRIMINAL fraud — § 45.0135 subd. 2g: the BCA “shall conduct investigations of criminal insurance fraud”
§ 60A.952 subd. 2 names YOU. “Any insurer or insurance professional that has reasonable belief … shall furnish and disclose all relevant information” — and § 60A.951 subd. 4b defines “insurance professional” to include adjusters
There is NO reporting deadline. The 30 days in subd. 4 is a tolling provision that operates after notice — a proper referral “tolls any applicable time period in any unfair claims practices statute … or any action … for bad faith.” It stops the clocks; it is not a deadline to start them
The fraud warning — § 60A.955 — four points people get wrongThe required language is “A person who files a claim with intent to defraud or helps commit a fraud against an insurer is guilty of a crime.” (1) It applies to claim forms only, never applications. (2) “Substantially as follows” makes it a safe harbor, not a verbatim mandate. (3) An addendum is expressly permitted. (4) “The absence of the required warning does not constitute a defense” in a prosecution. Related: § 60A.954 requires every insurer to maintain an antifraud plan, notifying the commissioner within 30 days of instituting or materially modifying it, with 60 days to resubmit a disapproved plan — but no SIU is mandated by name. Minnesota requires a plan and a named administrator, not a staffed unit.
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In Minnesota workers’ compensation, the EMPLOYEE picks the doctor — and the right lives in a RULE, not the statute
§ 176.135 subd. 1(a) imposes the duty to furnish care but does not itself confer choice. The operative right is Minn. R. 5221.0430:
• the provider “directing and coordinating medical care to the employee following the injury” is the primary health care provider;
• the employee may change primary providers once within the first 60 days after treatment begins, “without the need for approval from the insurer, the department, or a workers’ compensation judge”;
• after that, “any further changes of primary provider must be approved.”
This is the opposite of employer-directed-care states, where the employer selects the physician and controls care throughout. Here the employee selects, holds a free 60-day change right, and the employer’s leverage is confined to post-60-day approval.
A certified managed care plan narrows it — § 176.1351 routes selection through the plan, which must allow a change “at least once” and must permit treatment by a non-network provider “who maintains the employee’s medical records and has a documented history of treatment with the employee.”
Any national comp module built on employer-directed care must be overridden for Minnesota. And remember § 72A.201 subd. 10: the claims practices statute does not reach comp at all. Comp runs on chapter 176’s own clocks.
• the provider “directing and coordinating medical care to the employee following the injury” is the primary health care provider;
• the employee may change primary providers once within the first 60 days after treatment begins, “without the need for approval from the insurer, the department, or a workers’ compensation judge”;
• after that, “any further changes of primary provider must be approved.”
This is the opposite of employer-directed-care states, where the employer selects the physician and controls care throughout. Here the employee selects, holds a free 60-day change right, and the employer’s leverage is confined to post-60-day approval.
A certified managed care plan narrows it — § 176.1351 routes selection through the plan, which must allow a change “at least once” and must permit treatment by a non-network provider “who maintains the employee’s medical records and has a documented history of treatment with the employee.”
Any national comp module built on employer-directed care must be overridden for Minnesota. And remember § 72A.201 subd. 10: the claims practices statute does not reach comp at all. Comp runs on chapter 176’s own clocks.
| Workers’ compensation clock — ch. 176 | Period | Cite |
|---|---|---|
| Employer reports a death or serious injury | 48 hours | § 176.231 subd. 1 |
| Employer reports the injury to the insurer | 10 days | § 176.231 subd. 1 |
| Insurer files the First Report of Injury | no later than 14 days | § 176.231 subd. 2 |
| Commence temporary total compensation | 14 days of notice or knowledge | § 176.221 subd. 1 |
| File a denial of liability | 14 days after notice or knowledge | § 176.221 subd. 1 |
| Pay-then-deny window closes | 60 days | § 176.221 subd. 1 |
| PPD due after the first rating report | 14 days | § 176.221 subd. 7 |
| Medical treatment charges due | 30 calendar days | § 176.221 subd. 7 |
| Waiting period / retroactive trigger | 3 calendar days / 10 calendar days | § 176.121 |
| Employee notice — three tiers | 14 days · 30 days (prejudice) · 180 days hard bar | § 176.141 |
| Statute of limitations | 3 years from the written report, 6-year outer bar | § 176.151(a) |
tiers and outer bars — none of these is a simple deadlinecomp clocks are CALENDAR days, not business days
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The three-year comp clock starts when the First Report is FILED — so late filing extends your exposure
§ 176.151(a): “three years after a written report of the injury has been made to the commissioner, but not to exceed six years from the date of the accident.”
Read the trigger. The three years runs from the report, not the injury. If the employer or insurer never files the First Report, the three-year clock never starts — and the claim lives until the six-year outer bar from the date of accident.
Late filing is not a defensive tactic in Minnesota. It extends your exposure.
The pay-then-deny rule — § 176.221 subd. 1: where the insurer has commenced payment but determines “within 60 days” that the disability is not the result of a personal injury, payment may be terminated on a notice of denial filed within 60 days. After 60 days, primary liability can no longer be denied that way — you must proceed by discontinuance under § 176.239.
Late-payment penalties — subd. 3, and they escalate: 1–15 days late, up to 30% capped at $500 · 16–30 days, up to 55% capped at $1,500 · 31–60 days, up to 80% capped at $3,500 · 61 or more, up to 105% capped at $5,000 — and the penalty is “in addition to any penalty otherwise provided by statute.”
Read the trigger. The three years runs from the report, not the injury. If the employer or insurer never files the First Report, the three-year clock never starts — and the claim lives until the six-year outer bar from the date of accident.
Late filing is not a defensive tactic in Minnesota. It extends your exposure.
The pay-then-deny rule — § 176.221 subd. 1: where the insurer has commenced payment but determines “within 60 days” that the disability is not the result of a personal injury, payment may be terminated on a notice of denial filed within 60 days. After 60 days, primary liability can no longer be denied that way — you must proceed by discontinuance under § 176.239.
Late-payment penalties — subd. 3, and they escalate: 1–15 days late, up to 30% capped at $500 · 16–30 days, up to 55% capped at $1,500 · 31–60 days, up to 80% capped at $3,500 · 61 or more, up to 105% capped at $5,000 — and the penalty is “in addition to any penalty otherwise provided by statute.”
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PPD is a percentage times a BRACKET amount — not weeks, and not wage-based
Minnesota does not pay permanent partial disability in weeks of benefits and does not use the employee’s wage. § 176.101 subd. 2a: the injury is “rated as a percentage of the whole body” under the commissioner’s schedule (Minn. R. ch. 5223), and “The percentage … must be multiplied by the corresponding amount in the following table” — a bracketed dollar figure that rises with the rating.
Selected brackets: under 5.5% → $114,260 · 10.5% to under 15.5% → $129,485 · 25.5% to under 30.5% → $147,000 · 50.5% to under 55.5% → $181,965 · 95.5% to 100% → $567,840.
Worked example: a 12% whole-body rating falls in the 10.5%–15.5% bracket → 0.12 × $129,485 = $15,538.20.
Note what is absent: the average weekly wage plays no part, and neither does the maximum weekly rate. PPD is payable in a lump sum or in installments at the employee’s election, and is due 14 days after the insurer receives the first medical report containing a rating.
TTD, by contrast, is wage-based: “66-2/3 percent of the weekly wage at the time of injury” (subd. 1(a)), with the maximum set each October 1 at 108% of the statewide average weekly wage. Effective October 1, 2025: SAWW $1,423.00, max $1,536.84, min $307.37. The rate is fixed by date of injury, and TTD ceases entirely at 130 weeks. The figure taking effect October 1, 2026 has not yet been published — do not extrapolate it; pull the current DLI table.
Selected brackets: under 5.5% → $114,260 · 10.5% to under 15.5% → $129,485 · 25.5% to under 30.5% → $147,000 · 50.5% to under 55.5% → $181,965 · 95.5% to 100% → $567,840.
Worked example: a 12% whole-body rating falls in the 10.5%–15.5% bracket → 0.12 × $129,485 = $15,538.20.
Note what is absent: the average weekly wage plays no part, and neither does the maximum weekly rate. PPD is payable in a lump sum or in installments at the employee’s election, and is due 14 days after the insurer receives the first medical report containing a rating.
TTD, by contrast, is wage-based: “66-2/3 percent of the weekly wage at the time of injury” (subd. 1(a)), with the maximum set each October 1 at 108% of the statewide average weekly wage. Effective October 1, 2025: SAWW $1,423.00, max $1,536.84, min $307.37. The rate is fixed by date of injury, and TTD ceases entirely at 130 weeks. The figure taking effect October 1, 2026 has not yet been published — do not extrapolate it; pull the current DLI table.
Comp bad faith is a PERCENTAGE add-on — and “frivolously” is defined§ 176.225 subd. 1 requires “additional compensation of up to 30 percent” where the employer or insurer instituted a proceeding or defense “which does not present a real controversy but which is frivolous or for the purpose of delay”; unreasonably or vexatiously delayed payment; neglected or refused to pay; intentionally underpaid; frivolously denied; or unreasonably or vexatiously discontinued compensation. And the statute defines the standard: “Frivolously means without a good faith investigation of the facts or on a basis that is clearly contrary to fact or law.” Failing to investigate IS the frivolousness standard — the same lesson Peterson teaches on the § 604.18 side. Subd. 5 adds 25% for inexcusable delay and 12% per annum interest on unpaid departmental orders, and subds. 3 and 4 authorize a cross-agency escalation found in few states: a persistent insurer gets a written complaint filed with the commissioner of commerce recommending license revocation. These penalties stack with the § 176.221 late-payment penalties.
Ten scenarios — each one a place Minnesota departs from the national rule.
Read the fact pattern before the options. Most of these have a plausible wrong answer that is simply the majority rule somewhere else.
Read the fact pattern before the options. Most of these have a plausible wrong answer that is simply the majority rule somewhere else.
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Top Exam Tips — Minnesota Adjuster Regulations
1. Three CLASSES (independent, public, crop hail) and three LINES (P&C, workers’ comp, crop). Crop is both.
2. § 72B.10: staff adjusters are exempt from licensing but bound by § 72B.08 subd. 1 clauses (3)–(15) — and a $500 fine hits the INSURER.
3. No pre-licensing education. But fingerprints ARE required — $63.75 at PSI or $32 by mail, authorization expires in 1 year.
4. PSI: 35 scored + 5–15 unscored, 1 hour, $25, 70%, no waiting period to retake. One exam serves independent and public adjusters.
5. The license is perpetual while the fee is paid; renewal falls on the last day of your birth month. Two years is the CE biennium, not the term.
6. CE: 24 hours per biennium including 3 ethics hours — public adjusters too. Only two exemptions.
7. Catastrophe: the INSURER registers within 5 days of deployment; 180 days, extendable 180; $20.
8. § 72A.201 names “an adjuster” — and the commissioner “need not show a general business practice.” ONE violation is actionable.
9. Clocks: 10 / 30 / 60 BUSINESS days, 5 business days to pay an agreed settlement — but 15 WORKING days for the Commissioner and 30 CALENDAR days for a limits disclosure.
10. TWO accept-or-deny clocks — 30 business days from notification, 60 business days from a properly executed proof of loss.
11. No private right of action, and a § 72A.201 violation is not admissible in the § 604.18 case.
12. § 604.18 is TAXABLE COSTS, not punitive damages — lesser of 50% of the excess over the 10-days-pre-trial offer or $250,000, plus $100,000 fees. Ceiling $350,000.
13. Appraisal or arbitration extinguishes the § 604.18 remedy. No first-party bad-faith tort; third-party failure-to-settle is uncapped.
14. No-fault: $40,000 = $20,000 medical + $20,000 other, non-interchangeable. Your own policy pays first, not the car you rode in.
15. Tort threshold: medical NET of x-rays and rehabilitation must EXCEED $4,000 — or permanent disfigurement, permanent injury, death, or 60-day disability.
16. UIM is ADD-ON since 1989, and Schmidt v. Clothier requires 30 days’ written notice BEFORE the release.
17. 51% bar — and defendants’ fault is NOT aggregated. The plaintiff is compared to each defendant individually.
18. Minnesota HAS a valued policy law — full face amount on a total loss, burden on the insurer, and appraisal is unavailable on a building total loss.
19. Appraisers MAY decide causation (Quade) — a minority rule. Coverage stays with the court.
20. Guaranty: $300,000, NO $100 deductible, unearned premium NOT capped at $10,000, workers’ comp uncapped twice.
21. The Commerce Fraud Bureau was abolished in 2025. Report criminal fraud to the BCA. There is no reporting deadline — the 30 days is a tolling rule.
22. In comp, the EMPLOYEE picks the doctor, with one free change inside 60 days. PPD is a percentage times a bracket amount, not weeks.
2. § 72B.10: staff adjusters are exempt from licensing but bound by § 72B.08 subd. 1 clauses (3)–(15) — and a $500 fine hits the INSURER.
3. No pre-licensing education. But fingerprints ARE required — $63.75 at PSI or $32 by mail, authorization expires in 1 year.
4. PSI: 35 scored + 5–15 unscored, 1 hour, $25, 70%, no waiting period to retake. One exam serves independent and public adjusters.
5. The license is perpetual while the fee is paid; renewal falls on the last day of your birth month. Two years is the CE biennium, not the term.
6. CE: 24 hours per biennium including 3 ethics hours — public adjusters too. Only two exemptions.
7. Catastrophe: the INSURER registers within 5 days of deployment; 180 days, extendable 180; $20.
8. § 72A.201 names “an adjuster” — and the commissioner “need not show a general business practice.” ONE violation is actionable.
9. Clocks: 10 / 30 / 60 BUSINESS days, 5 business days to pay an agreed settlement — but 15 WORKING days for the Commissioner and 30 CALENDAR days for a limits disclosure.
10. TWO accept-or-deny clocks — 30 business days from notification, 60 business days from a properly executed proof of loss.
11. No private right of action, and a § 72A.201 violation is not admissible in the § 604.18 case.
12. § 604.18 is TAXABLE COSTS, not punitive damages — lesser of 50% of the excess over the 10-days-pre-trial offer or $250,000, plus $100,000 fees. Ceiling $350,000.
13. Appraisal or arbitration extinguishes the § 604.18 remedy. No first-party bad-faith tort; third-party failure-to-settle is uncapped.
14. No-fault: $40,000 = $20,000 medical + $20,000 other, non-interchangeable. Your own policy pays first, not the car you rode in.
15. Tort threshold: medical NET of x-rays and rehabilitation must EXCEED $4,000 — or permanent disfigurement, permanent injury, death, or 60-day disability.
16. UIM is ADD-ON since 1989, and Schmidt v. Clothier requires 30 days’ written notice BEFORE the release.
17. 51% bar — and defendants’ fault is NOT aggregated. The plaintiff is compared to each defendant individually.
18. Minnesota HAS a valued policy law — full face amount on a total loss, burden on the insurer, and appraisal is unavailable on a building total loss.
19. Appraisers MAY decide causation (Quade) — a minority rule. Coverage stays with the court.
20. Guaranty: $300,000, NO $100 deductible, unearned premium NOT capped at $10,000, workers’ comp uncapped twice.
21. The Commerce Fraud Bureau was abolished in 2025. Report criminal fraud to the BCA. There is no reporting deadline — the 30 days is a tolling rule.
22. In comp, the EMPLOYEE picks the doctor, with one free change inside 60 days. PPD is a percentage times a bracket amount, not weeks.
§ 72B.03 subd. 2
Three classes — independent, public, crop hail — and a license that “remains in effect … as long as the fee … is paid.”
§ 72B.10
Staff adjusters: exempt from application, licensing and examination — but bound by § 72B.08 subd. 1 clauses (3) through (15), with a $500 fine on the insurer.
§ 72B.02 subd. 5
The two-part definition — contracting for compensation and independent-contractor tax treatment. Employees fall outside it.
§ 72B.03 subd. 3
“No insurer, agent … nor any adjuster shall pay any fee … for acting as an adjuster, except to a person duly licensed.” The payer is liable too.
§ 72B.041 subd. 2
Fingerprints and a criminal history record check — $63.75 electronic at PSI or $32 by mail; authorization expires in one year.
§ 72B.041 subd. 3
The public adjuster’s $10,000 bond, “with the state of Minnesota as obligee.” Not § 72B.135 — get the citation right.
§ 72B.045
24 CE hours biennially, three of them ethics. Two exemptions only: under one year licensed, or a nonresident meeting the DHS requirement.
§ 72B.06
Emergency independent adjuster — the INSURER registers within five days of deployment; 180 days, extendable 180; $20; summary revocation available.
§ 72B.105
Records: keep the contract and comply with “the record retention policy as agreed to in that contract.” No year count for independent adjusters.
§ 72B.135
Public adjuster conduct — 72 hours to cancel, a ten-point boldface notice plus a detachable NOTICE OF CANCELLATION, eleven prohibitions, five years of files.
§ 72A.201 subd. 1
“The commissioner need not show a general business practice” — and “no individual violation” is actionable under § 8.31. One violation, no lawsuit.
§ 72A.201 subd. 4(3)(i) & 4(11)
The two accept-or-deny clocks — 30 business days from notification of claim, 60 business days from a properly executed proof of loss.
§ 72A.201 subd. 10
“This section does not apply to workers’ compensation insurance. Nothing in this section abrogates any policy provisions.”
§ 65A.296
The homeowner’s proof-of-loss overlay — it supersedes § 65A.01 and § 72A.201, and the 60-day bar depends on certified-mail notice.
§ 604.18 subd. 3
Taxable costs, not punitive damages — the lesser of 50% of the excess over a 10-days-pre-trial offer or $250,000, plus $100,000 in fees.
§ 604.18 subd. 4(c)
The award “is not available in any claim that is resolved or confirmed by arbitration or appraisal” — and Minnesota routes claims into both.
Peterson v. Western National
946 N.W.2d 903 (Minn. 2020) — the objective prong asks what a reasonable insurer would have found after a full investigation. A thin file is the problem, not the defense.
Short v. Dairyland
334 N.W.2d 384 (Minn. 1983) — third-party failure to settle. Evaluate “as if there were no policy limits” and give equal consideration to the insured’s exposure. Uncapped.
§ 65B.47 subd. 4
No-fault priority — your own security first. The vehicle-first rule survives only for business-of-transporting and employer-furnished vehicles.
§ 65B.51 subd. 3
The tort threshold — medical net of x-rays and rehabilitation must exceed $4,000, or permanent disfigurement, permanent injury, death, or 60-day disability.
§ 65B.49 subd. 4a
UIM = “damages sustained but not recovered” — the add-on method since August 1, 1989. Broton is pre-1989 law.
Schmidt v. Clothier
338 N.W.2d 256 (Minn. 1983) — 30 days’ written notice to the UIM carrier BEFORE releasing the tortfeasor, or the UIM right is forfeit.
§ 604.01 subd. 1
51% bar — and the noun is singular. Marier and Cambern: defendants’ fault is not aggregated.
§ 65A.08 subd. 2
The valued policy law — the whole amount on a total loss, defeated only by a risk-increasing change (insurer’s burden) or intentional fraud.
Quade v. Secura
814 N.W.2d 703 (Minn. 2012) — appraisers may determine causation and allocate between covered and excluded perils. Coverage stays with the court.
§ 72B.092 subd. 1(5)
No adjusting a shop’s appraisal when the extent of damage is disputed without a physical inspection. Go look at the car.
§ 60C.09 subd. 3
Guaranty — $300,000, no $100 deductible, unearned premium rides the full cap, and workers’ compensation is uncapped.
§ 299C.061
The Financial Crimes and Fraud Section of the BCA — successor to the Commerce Fraud Bureau, which was abolished in 2025.
Minn. R. 5221.0430
The comp rule that gives the employee the choice of primary provider, with one free change inside 60 days. The right is in the RULE, not the statute.
§ 176.225 subd. 1
Comp bad faith — up to 30% additional compensation, and “frivolously means without a good faith investigation of the facts.”
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