Minnesota no fault insurance system may crack under pressure

No Fault InsuranceMinnesota’s no-fault auto insurance law has been under fire recently. Opponents of the law have been trying for some time to repeal the legislation, with their latest attempt again being overruled today. However, the state’s Senate committee approved a number of amendments to the law that may curb legislators drive to repeal it. The committee will also be examining alternatives to the law that will favor insurance companies by limiting payouts.

The number of underinsured and uninsured drivers in the state is rising, according to Deputy Senate Majority Leader Geoff Michel. Michel says that the sheer number of unprotected drivers is enough to drive up insurance premiums as well as increasing the prevalence of fraud in the state.

Currently, 9 other states have no-fault auto insurance laws, down from 24 only a few years previous. Minnesota is the only state in the region that has such a law and, as such, presents an opportunity for exploitation. By repealing the law, Michel says that the occurrence of fraud would be drastically reduced.

A number of legislators proposed changes to the law, some of which were backed by officials in the insurance industry. Senator Linda Scheid is looking to raise the limit on benefits for pain and suffering. She proposes that only injuries resulting in permanent physical impairment should qualify individuals for benefits from their insurers.

No explicit changes have yet been made to the law, and repeal efforts have been sidelined until legislators can find a viable alternative.

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