The Minnesota No-Fault Act: Long Overdue Changes Needed

May 25, 2011  |  John T. Buchman

Minnesota passed the “No-Fault Act” in 1974 and it became effective on January 1, 1975.  The purpose of the Act was, among other things, to insure prompt payment of certain types of benefits to replace lost wages and to pay for medical care.  Minn. Stat. 65B.42.  One of the goals was to reduce public funds being used to help uncompensated victims of car crashes who could not afford medical care or could not work because of injuries suffered in a car crash.  Another goal was to eliminate small value lawsuits and reduce the drain on judicial resources.  In return, injured people gave up certain rights too, namely that they must satisfy a tort “threshold” to recover any non-economic losses from the party causing the collision.  One of the main “thresholds” is whether or not the person suffered a “permanent” injury.  At trial, injured people lose approximately 40-50{a0c01d20c42349884e67ff80c137866b0a9fe47aaae8f8a86a605a369ae487c3} of the time and recover nothing because a jury finds that they have not suffered a “permanent” injury.
One of the no-fault benefits is reimbursement for lost wages.  Initially, the legislature indicated that a person could obtain 85{a0c01d20c42349884e67ff80c137866b0a9fe47aaae8f8a86a605a369ae487c3} of their lost wages subject to a maximum of $200 per week.  In 1979 the maximum wage loss amount was increased to $250 per week.  Unfortunately, in the following 32 years, the $250 weekly maximum has not changed.  As a result, injured people are finding that they cannot survive economically if they suffer a serious injury that keeps them out of work for several weeks.  Certainly, costs for gasoline, food, mortgage payments and medical expenses have not stayed at their 1979 levels.
Additionally, the funeral benefit was set at $2,000 in 1975 and has not been changed since.  The average funeral now costs well in excess of $10,000.  Thus, families that have lost a loved one through the carelessness of another driver are disappointed to learn that they can only obtain $2,000 from their own car insurance carrier.  The at-fault driver’s insurer almost never offers or pays any money to make up the difference until the case is settled, which may take another year or two.
Also, the No-Fault Act set survivor’s economic loss benefits subject to a $200 per week maximum.  Thus, if a wage-earning spouse with young children dies and had earned $65,000 each year, that lost salary is replaced with $10,400 in benefits.  Again, the at-fault driver’s insurance company does not make any advance payments and it can often take months or years to resolve the claim against the at-fault driver.
The Minnesota Association for Justice, an organization to which I belong, has tried for several years now to raise these limits the victim’s maximum amounts have not been raised to account for inflation in more than 30 years.  Unfortunately, the insurance company lobbyists and some legislators have prevented these bills from passing.
What can you do?  You can contact your insurance agent and ask them to increase your wage loss benefits to $500 a week at a nominal cost of $20 or less for every six months.  However, this doesn’t do anything about the low funeral expense benefit.  Additionally, you can contact your legislators during the next legislative session and urge them to support bills offered by MNAJ regarding no-fault insurance to raise these unfairly low limits.
If you you’ve any questions, you can e-mail me at or call me at 763-783-5121.
~ Jon T. Buchman
Personal Injury Attorney