Lilah Butler, Car Insurance Writer
@lilah_c
A car is considered a total loss in Minnesota when the cost of repairs plus the salvage value is at least 80% of the vehicle’s actual cash value. Actual cash value refers to how much the car was worth immediately before the damage, while the salvage value is the car’s worth in its damaged state.
When a car is totaled according to the Minnesota totaled car law, the policyholder will receive the car’s actual cash value from the insurance company if the loss was covered. {sales tax sentence}
Minnesota Total Loss Threshold
The Minnesota total loss law is also called a total loss threshold. Threshold systems account for the fact that damage is often more extensive than it appears. For instance, the threshold of 80% assumes that a car with that much damage is likely to have even more problems that won’t be visible until a mechanic starts repairing the car.
Minnesota Total Loss Law Example
- Pre-crash value: $15,000
- Cost of repairs: $3,000
- Salvage value: $8,000
- Sum of salvage value plus repair cost: $11,000 (greater than $10,500, which is 80% of the pre-crash value)
- Result: car is declared a total loss
In this example, the driver’s car is totaled according to Minnesota law because the sum of its repair cost plus its salvage value is more than 80% of its pre-crash value, or actual cash value (ACV).
It’s also worth noting that the vehicle used in this example probably cost more than $15,000 when it was originally purchased. The ACV is meant to reflect the car’s worth in its depreciated state, not the cost of replacing the vehicle. If you want a higher payout in the event of a total loss, you should look into optional coverage add-ons like new car replacement or gap insurance.
For more information on what it means for you if your car is totaled, check out WalletHub’s totaled car guide.
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read full answerWhat is the penalty for driving without insurance in Minnesota?
The penalties for driving without insurance in Minnesota can include fines up to $1,000, fines, suspension of license and registration, impounding your car, and imprisonment. Penalties for repeat offenses may be even harsher, including a longer jail sentence.
Penalties for Driving Without Insurance in Minnesota
| Type of Offense | License and/or Registration Suspended? | Car Impounded? | Jail Time? | SR-22 Required? | Maximum Fines & Fees |
| No Proof of Insurance (Can Prove Coverage Later) | No | No | No | No | Dismissed with proof |
| 1st Offense With No Coverage | Yes, both | Yes | Up to 90 days | No | $200-$1,000 |
| Repeat Offense (No Coverage) | Yes, both | Yes | Up to 1 year | No | $200-$3,000 |
Not having car insurance and not being able to prove that you have it are two different violations. If you have insurance but cannot prove it when you get pulled over or at the scene of an accident, you are guilty of an "administrative violation", similar to a seat-belt ticket. In Minnesota, your citation might be dismissed if you can provide the court with proof of valid insurance for the date of the citation on or before your court date.
Driving without car insurance at all is much more serious, and the penalties are more severe. In addition to the legal consequences, you can also expect your car insurance premium to go up.
You can avoid these consequences by purchasing the car insurance coverage required in Minnesota.
Required Car Insurance in Minnesota
- $30,000 in bodily injury liability coverage per person
- $60,000 in bodily injury liability coverage per accident
- $10,000 in property damage liability coverage per accident
- $40,000 per person per accident in personal injury protection coverage
- $25,000 per person, $50,000 per accident in uninsured/underinsured motorist coverage
The key to maintaining the minimum amount of coverage required by Minnesota is to find a policy you can afford. If your coverage has already lapsed, start by comparing quotes from the insurance companies WalletHub's analysis identified as having the best post-lapse rates.
Best Car Insurance in Minnesota After a Lapse in Coverage
Drivers in Minnesota pay an average of $1,185 per year to maintain the minimum amount of coverage. That's nothing compared to the consequences of driving without insurance, especially if you get into an accident.
What Happens If You Get Into a Car Accident Without Insurance in Minnesota?
- All penalties will apply if you get into an accident. If you get into an accident while driving without insurance in Minnesota, you will incur the penalties for driving without insurance no matter who is at fault. Driving uninsured can make it difficult to be compensated for damages if you are not at fault and can have long-lasting and life-changing consequences if you are at fault.
- If the accident is your fault, you'll have to pay for all the damages out of your own pocket. In addition to the legal consequences of driving without insurance, you could easily be responsible for tens of thousands of dollars or more in damages to your vehicle, the other driver's car repairs and hospital bills, and your own medical care. You could face mounting debt or even bankruptcy, especially if the other driver doesn't carry uninsured motorist coverage or personal injury protection.
- Even if the accident is not your fault, driving without insurance may leave you responsible for your accident-related expenses. If you're in an accident in a no-fault state such as Minnesota and you don%t have car insurance, you'll probably end up paying for hospital bills and medical expenses out of your own pocket. However, if the other driver was at fault and your injuries medical expenses that exceed $4,000.00, permanent disfigurement or injury, death, or disability for 60 days or more, then you can sue the at fault driver for damages.
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