State Senator Geoff Michel Calls for an End to State’s No Fault Auto Insurance System
Legislation Would Bring Insurance Premiums In Line With Surrounding States

Sen. Geoff Michel (R-Edina) and Rep. Tim Wilkin (R-Eagan) today proposed scrapping the state’s No-Fault Auto Insurance system to reduce costs for Minnesota drivers. They made the announcement in a civics classroom at St. Bernard's Catholic High School in St. Paul, where juniors and seniors studied the state's auto insurance system and recommended the change.

''We as teenagers pay so much a month and we didn't think this was right,'' said Missy Bohland, a senior. ''This personally would save me $380 a year.''

Minnesota is one of only 10 states to require no-fault insurance. The state's drivers pay an average of $800 a year for insurance, compared with $609 in Wisconsin and $533 in North Dakota.

“The same coverage for the same driver should not be so much greater in Minnesota,” said Michel. “There’s no good reason why our rates shouldn’t be closer to our neighbor’s rates.”

Wilkin said the state's no-fault system has led to unreasonable costs because the system doesn't limit medical claims, even for minor injuries. Eliminating no-fault insurance would bring premiums more in line with surrounding states, he said. The legislation would require a 20 percent reduction in premiums, saving Minnesota drivers an average of $160 a year.

Lowering premiums would probably reduce the number of uninsured drivers on the roads, currently estimated at about 15 percent, Wilkin said.

Minnesota’s No-Fault Auto Insurance system was adopted in the mid-1970s and was intended to compensate drivers for the costs of their medical care if injured in an accident without having to spend the time determining who was at fault in the accident. But a key part of the law was intended to prevent minor accidents from entering the court system.

However, court decisions have allowed virtually any accident to end up in a tort lawsuit, defeating the original purpose of No-Fault Auto.

“Sadly, Minnesotans are paying too much for auto insurance because we are really paying for two systems….both a No-Fault and a traditional At-Fault Tort system,” said Michel. “If we don’t do something soon, we’ll be a Top 10 state on auto insurance premiums. If we can’t fix it, we need to repeal it and bring some sanity back to our auto insurance system.”