Minnesota Casualty Study Guide

A national casualty course teaches personal injury protection as a single limit you spend down, and teaches underinsured motorist coverage as something an insurer offers and an applicant may decline. Minnesota’s No-Fault Automobile Insurance Act, Minn. Stat. §§ 65B.41 to 65B.71, does neither. Its $40,000 PIP benefit is two limits that cannot see each other, and its uninsured and underinsured coverages are compulsory with no rejection option.

Two more moves break the pattern. The tort threshold is a formula with a subtraction inside it, not a bill total. And the definition of “motor vehicle” writes motorcycles out for the coverage you buy on yourself, then writes them back in for the coverage that protects you from somebody else.

None of that is policy language. It is arithmetic and vocabulary — which is why a Minnesota item can be built on a single word.

The $40,000 that is not $40,000

Read § 65B.44, subd. 1(a) for its structure before its number. The obligor must provide

“a minimum of $40,000 for loss arising out of the injury of any one person, consisting of: (1) $20,000 for medical expense loss … and (2) a total of $20,000 for income loss, replacement services loss, funeral expense loss, survivor’s economic loss, and survivor’s replacement services loss.”

Two things follow, and both are testable. The buckets are non-fungible — unused medical does not migrate to the income side, and unused income does not pay a hospital. And the second bucket is shared among five heads of loss, so wage loss, household help, a funeral and both survivor’s benefits all compete for the same $20,000.

Work the arithmetic in sentences until it is automatic. An insured with $32,000 of medical expense and $6,000 of wage loss is paid $26,000, not $38,000: $20,000 of medical, capped, plus $6,000 of income loss out of the other bucket. $12,000 of medical goes uncompensated while $14,000 of the non-medical bucket sits unused. The intuitive answer — $38,000, or the whole $40,000 — is wrong in precisely the direction the exam will offer it to you.

The sublimits inside that shared bucket fail the same instinct. Income loss is 85% of lost gross income subject to a maximum of $500 per week (subd. 3(a)), so a claimant earning $1,200 a week collects $500, not $1,020. Replacement services are capped at $200 per week and exclude the date of injury and the following seven days (subd. 5). And subd. 3(d) forecloses the obvious workaround in its own words: “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.”

The tort threshold is a formula, not a bill total

§ 65B.51, subd. 3 bars an action for noneconomic detriment unless one of five doors is open: death, permanent disfigurement, permanent injury, disability for 60 days or more, or medical expense exceeding $4,000.

Only the last is arithmetic, and it runs the opposite way from where a fact pattern points. You subtract benefits paid for diagnostic x-rays and for treatment that is rehabilitative rather than remedial. You add the reasonable value of nursing services performed without charge by a relative or household member.

So a claimant with $4,300 in bills of which $600 is diagnostic imaging computes $3,700 and has not crossed — while a claimant with $3,800 of bills plus $500 of unbilled family nursing care computes $4,300 and has. Then read the operator: the sum must exceed $4,000, so exactly $4,000 fails.

The other four prongs open the door regardless of the arithmetic, and “disability” is the narrow one: inability to engage in “substantially all” of the person’s usual and customary daily activities, not inability to work.

A motorcycle is not a motor vehicle — until it is the other vehicle

This is a definition, not an exclusion. § 65B.43, subd. 2 defines a motor vehicle as “every vehicle, other than a motorcycle or other vehicle with fewer than four wheels.” Three consequences follow: no compulsory PIP, liability coverage only under § 65B.48, subd. 5 with a mandatory application notice saying so, and no UM or UIM to an insured occupying a motorcycle they own (§ 65B.49, subd. 3a(8)).

Then the word comes back. §§ 65B.43, subds. 16 and 17 each add “or motorcycle” into the uninsured and underinsured motor vehicle definitions — so a motorcycle can be the uninsured vehicle that hits you even though it is not a “motor vehicle” for PIP. A candidate who has learned only “motorcycles are excluded” answers one half of this right and the other half wrong.

Compulsory UM and UIM, measured in damages

§ 65B.49, subd. 3a(1) states it as a mandate on the policy — no plan of reparation security may be renewed, delivered, issued for delivery or executed here for a vehicle registered or principally garaged in Minnesota “unless separate uninsured and underinsured motorist coverages must be provided for all motor vehicles registered or principally garaged in Minnesota” — at 25/50 each, with no rejection option. That alone reverses the national teaching.

Then subd. 4a changes the measure. Minnesota computes UIM as a difference of damages, not a difference of limits: the maximum liability is the damages sustained but not recovered from the at-fault vehicle’s insurance, capped by the UIM limits. A claimant with $80,000 of damages who recovered $30,000 from the tortfeasor looks at the $50,000 shortfall against their own UIM limits — never at the gap between two sets of limits.

Two anti-stacking rules sit a section apart and are deliberately different in strength. PIP limits for two or more vehicles may not be added together “unless a policyholder makes a specific election” (§ 65B.47, subd. 7). UM and UIM stacking is barred absolutely: “in no event” may the limits for two or more motor vehicles be added together (§ 65B.49, subd. 3a(6)).