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In Minnesota, a car accident claim is potentially worth the value of your and the at-fault driver’s auto insurance policy limits. But what does that mean? What really are policy limits, and how do the other car’s policy limits affect the value of my case and my potential compensation?
These are all great questions to consider, especially if you are looking to retain a personal injury lawyer. Before we dissect policy limits and the claim’s overall potential value, we should discuss treatment.
It’s vital to know that the value of your claim is greatly reduced if you do not seek treatment for your injuries. Claims are evaluated based on medical costs incurred as a result of the collision, the pain and suffering you endured during these treatments, and the overall alteration of your daily life. No matter the value of the policy limits, if you do not seek treatment for your injuries, the insurance companies will reduce the value of your claim.
Now that you know the importance of treatment, let’s discuss policy limits.
Policy limits are the amount of coverage you selected when you purchased auto insurance. They are referred to as policy limits because that is the most your insurance will pay under your policy selection.
In Minnesota, there are minimum required policy limits for the no-fault (NF) or personal injury protection (PIP) claims, liability or bodily injury (BI) claims, and uninsured/underinsured (UM/UIM) claims.
While these are the minimum policy limits required in Minnesota, insurance companies will offer additional coverage or higher limits for a higher cost.
Let’s put these policy limits into practice. You and one other driver were involved in a collision, and it was determined that the other driver was at fault. You both had injuries that required treatment, you are both insured, and you both have minimum policy limits on your vehicles. So, what’s the maximum value of your overall claim?
If your insurance policy pays the full $20,000 in medical expenses and mileage reimbursement, and you are eligible for an additional $20,000 in wage loss and replacement services, and you use the full amount, then the total value for the no-fault claim would be $40,000.
However, most people either don’t qualify or choose not to participate in mileage reimbursement, replacement services, or wage loss. Meaning you could be leaving $20,000 on the table of unused benefits. As noted earlier, these benefits must be applied for, have specific requirements, and can be revoked. If you are interested in receiving all your benefits, it would be advisable to speak with a personal injury attorney to help guide you through the claims process.
Despite the maximum no-fault value being $40,000, you would not receive a $40,000 check, as the no-fault medical benefits are paid directly to the facility where you received treatment. Any bills received will continue to be paid until the $20,000 in medical benefits are exhausted or you are cut off due to an independent medical examination (IME). If you qualify, apply, and are approved, you would receive a weekly check for your non-medical benefits. Wage loss is reimbursed at 85% of weekly wages, up to $500 per week, and replacement services are reimbursed at up to $200 per week. If you qualify for these benefits, you could potentially receive checks for wage loss and replacement services each week until the $20,000 in non-medical benefits are exhausted. If you are interested in receiving the most from your benefits, it would be advised to contact a personal injury attorney so they can help you through the claims process
After exhausting your benefits, you will pursue a claim against the at-fault driver’s insurance. How the value is determined in bodily injury cases is based on medical costs, pain and suffering, and the alteration of daily life. If you have exhausted your medical benefits at $20,000 and the at-fault driver has a minimum policy limit, it’s likely you will receive the full policy limit value of $30,000 due to the overall medical costs already incurred and expected to incur in the future.
However, some insurance companies argue that the medical bills were paid by your insurance and try to use that to lower the overall claim value. Attempting to do so does not relieve them of the monetary burden, especially if they have admitted liability or if the police report cites their insured.
Even if the insurance company agrees to pay the full $30,000 policy limit, you would likely not receive a check for $30,000. If you retain an attorney, the standard fee is 1/3 of the settlement, which at $30,000 is $10,000 to the law firm, in addition to any fees incurred while handling your claim. Additionally, if your health insurance paid for treatments related to the collision, they will seek reimbursement in the form of a subrogation lien, with reimbursement coming from the settlement proceeds. This means that in our example, while the value of the BI claim is $30,000, you would receive a check for less than $20,000.
Despite the 1/3 in attorney fees, individuals repeatedly note that, after retaining an attorney, they received higher settlement offers and more settlement money for their claim. While it’s tempting to pursue a BI claim on your own to maximize your overall compensation, it is counterintuitive to the overall claim, as insurance companies have been known to offer smaller settlement amounts to individuals who have not retained an attorney.
If you want to pursue a bodily injury claim, it would be wise to contact a personal injury attorney, as insurance companies are not looking to provide you with the full value of the claim. If you have any questions or would like to discuss your claim, you can call BK Law Group at 952-314-5101, and their dedicated personal injury team would be happy to help.
If your medical expenses exceed the cost of your policy limits and the at-fault driver’s policy limits, then you should contact a personal injury attorney so they can help you with the underinsured motorist claim. The required minimum for an underinsured motorist claim is $25,000 per person and $50,000 for two or more people. Meaning in our example, you could receive up to $25,000 if your medical costs exceeded both your policy limit of $20,000 and the at-fault driver’s policy limit of $30,000. However, as previously noted, you will likely not receive a $25,000 check, as the standard attorney’s fee is 1/3 of the settlement, which at $25,000 is $8,333.33 to the law firm. This means that, in our example, while the underinsured motorist claim is valued at $25,000, the compensation you would receive would be around $16,000 or less.
In our example, the total value of all policy limits is $95,000. If all potential claims (NF – medical and non-medical, BI, and UM/UIM) reached their policy limits, the total compensation you would potentially receive is $56,000 or less (only accounting for attorney’s fees). However, to receive that type of compensation means you were severely injured to the point of forever altering your daily life. It’s an important reminder that personal injury cases are compensated based on the medical costs incurred, the pain and suffering endured, and the impact on your daily life. If you receive high compensation, it’s likely that you have a permanent injury, a scar, or have incurred excessive amounts of medical costs for your treatments. If any of these situations apply, we recommend contacting a personal injury attorney to assist you with the claim while you focus on your recovery and overall well-being.
Stepping outside of our example, the most common cases I’ve seen involve soft tissue injuries and regular treatment that slowly tapers off as you recover. That type of claim usually does not involve wage loss or replacement services, as these benefits typically require a doctor’s note and additional documentation before insurance approval. I’ve seen these types of claims receive the full no-fault medical benefits of $20,000, and I’ve seen these claims be cut off after $11,000. That’s why it’s important to contact a personal injury attorney if you are seeking compensation from a collision.
Insurance companies make their money hoping that you will not advocate for yourself and will not retain an attorney. They hope to offer you a $500.00 check to settle the claim now, so they will not have to pay the claim’s value in the future. Once you accept a settlement check, you will be forever barred from reopening that claim, and insurance companies want to close the claim as soon as possible.
The average case also does not typically involve opening an underinsured motorist claim, as most individuals have healed by the time we reach that point and no longer require treatment for the injuries sustained in the collision.
Now that we’ve discussed the average claim, let’s return to our example and find the average value for a motor vehicle collision in Minnesota.
If you regularly treat, you will likely receive the full $20,000 in medical benefits, which is paid directly to the facility. If, in addition to treatment, you request mileage reimbursement, the insurance company will send a check directly to you. If you have lost time at work as a result of the collision or if you are unable to do certain tasks due to the collision, you may be entitled to an additional $20,000 in non-medical benefits.
The total value for a no-fault claim would be $40,000, but you would likely only receive a portion of the $20,000 in mileage reimbursement, and if applicable, a portion of the $20,000 in non-medical benefits.
While the total value of the no-fault claim is $40,000, an average case with soft tissue injuries, no wage loss, and no replacement services would equate to a few hundred dollars paid to you for mileage reimbursement. It’s important to note that no-fault claims are not meant to account for pain and suffering but to cover the cost of medical and economic needs while the bodily injury or liability claim is being settled. If you are interested in pursuing the additional no-fault benefits, it would be wise to contact a personal injury attorney so they can assist you in the claim.
If you have been injured in a collision, you could pursue a claim against the at-fault driver’s insurance called a bodily injury (BI) or liability claim. The value of a bodily injury claim is determined by the medical costs, pain and suffering, and the alteration of daily life. If you have exhausted your no-fault medical benefits, you will likely receive the full policy limits of $30,000.
Unlike the no-fault claim, the bodily injury claim will compensate you for pain and suffering, meaning the claim is not solely dependent on the cost of treatment to determine the overall value.
Even if the insurance company agrees your claim is worth the full policy limits of $30,000, you would not receive a $30,000 check, as the attorney’s fees are 1/3 of the settlement amount. Meaning $10,000 would go to the law firm in addition to any expenses incurred during the handling of your case, and you would receive a check for $20,000 or less.
If you have not exhausted your policy limits, and you would like to bring a claim against the at-fault driver, you will need to have either $4,000 or more of medical treatment, permanent disfigurement, permanent injury, disability for 60 days or more, or death. If you have not exhausted your policy limits and have reached the $4,000 threshold, you will likely receive some compensation from the at-fault driver’s insurance; however, you might not receive the full value of the policy limits. If the insurance company values your claim at $10,000, you would likely receive a check for around $6,600.00 to account for the attorney’s fees and additional expenses incurred while handling your case. While each personal injury case is unique and involves its own specific circumstances, the compensation for all bodily injury cases directly depends on the amount of treatment received, the pain and suffering endured, and the alteration to daily life.
Despite a claim having minimum policy limits, insurance companies will find any reason to devalue your claim and minimize your injuries to reduce the overall compensation owed. If you are looking to pursue a bodily injury claim, it’s advised to contact a personal injury attorney so they can assist you in handling all aspects of the claim and in receiving the most compensation possible.
In a standard case, you will likely not have an underinsured motorist claim, and in most cases, individuals either do not qualify or choose not to apply for wage loss and replacement services, meaning your cases’ overall value is reduced.
If you received the full $20,000 in medical benefits from your no-fault insurance and the full $30,000 policy limit from the at-fault party’s insurance, then your total case value would be $50,000. However, the overall estimated value of the case would not equal the amount of your settlement check, as the various claims are paid out differently.
With no-fault insurance, you would not receive a direct $20,000 check to pay outstanding medical debt; rather, these bills would be paid directly by your no-fault insurance as you continue to treat and until the total reaches $20,000 or you are cut off due to an independent medical examination (IME). If your benefits were cut off due to an IME, it would be wise to contact a personal injury attorney to assist you with your overall claim.
If you qualify or choose to apply for non-medical benefits, you could receive up to $500 per week for wage loss, and up to $200 per week for replacement services. This would continue until you no longer needed the services and were back at work, or until the $20,000 in non-medical benefits were used. Mileage reimbursement and non-medical benefits are the only no-fault benefits that pay you directly. If you would like assistance navigating your claim and receiving the most benefits possible, call BK Law Group, and our dedicated personal injury team would be happy to help.
Unlike the no-fault claim, the bodily injury settlement is the only time you receive payment for the bodily injury claim. This claim will not pay weekly for replacement services or wage loss; rather, it will account for all elements of the case and pay a lump sum at the conclusion of the claim.
After a settlement has been reached, deductions are made. Deductions include the standard personal injury lawyer’s fees (1/3 of the settlement), additional expenses incurred by the law firm while working on your case, and any outstanding liens from prior attorneys or your health insurance.
If the insurance company values your case at the full policy limits of $30,000, and 1/3 is taken for the attorney’s fees, $100 is taken for additional expenses, and $1,000 is for the health insurance lien, you would walk away with a check totaling around $18,900. However, this is just an example, and the numbers and values for each case are unique. If you are interested in reviewing the value of your claim, call BK Law Group, and our dedicated personal injury team would be happy to discuss your case.
Similar to bodily injury claims, the uninsured/underinsured claims are paid in one lump sum at the conclusion or settlement of the case. If you are interested in pursuing an uninsured/underinsured claim, it would be wise to contact a personal injury attorney for assistance in handling your claim.
The value of your case is determined by several factors, including the policy limits you and the at-fault party have, the injuries you sustained during the collision, the treatments you received for these injuries, the pain and suffering you endured during recovery, and the overall alteration of daily life. Each of these elements plays an important role in your case’s value. It’s important to remember that the value of your case would not equal the settlement amount, as you must account for attorney’s fees, additional expenses incurred, and potential liens. If you would like to receive the most value for your case, it would be advised to contact a personal injury attorney, as insurance companies have been known to offer less settlement money to unrepresented individuals.
At BK Law Group, we work diligently to ensure you receive the most compensation possible for your claim. For a free consultation of your case, call BK Law Group, and our dedicated personal injury team would be more than happy to help.
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