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									The Case to Repeal Minnesota’s No-Fault Auto Law
Minnesota has the 16th highest auto insurance premiums in the country, now averaging $800 per year. Nationally, rates have risen 1.5% in the last 4 years. Minnesota’s premiums have grown more than 9% in the same time frame. All of our surrounding states have much lower premiums. Repealing our no-fault law would put Minnesota in the same place that 40 other states are, namely having a ‘traditional tort’ auto insurance system. Sixteen states adopted nofault laws between 1971 and 1976, and 5 have repealed their laws since adoption.

 Insurance for Minnesota Drivers is Becoming Unaffordable
 No-Fault Auto PIP coverage was intended to reduce minor injury accidents from going to court, thus saving money for consumers.  The system is broken. Too many claims go through both the No-Fault System AND into court. This double dipping dramatically increases costs, which get reflected in higher premiums.  The original intent of the law was to have one insurance system, but sadly consumers today are paying for two.  There are no modern, common sense medical cost controls in our law.

 Fraud is Out of Control
 Hundreds of millions of dollars per year are paid in fraudulent No-Fault claims either through faked accidents, phantom billing or excessive/unnecessary treatments.  The state system set up to address insurance fraud is not yet established. This criminal activity must be reigned in.

 The Number of Minnesotans Without Auto Insurance is Increasing
 Wisconsin, which does not mandate auto liability coverage, has a higher rate of insured drivers than Minnesota does where the law requires coverage.  The number of claims for uninsured/underinsured coverage is increasing.  The number of drivers carrying only the state mandated minimum coverage has been steadily increasing over the past 20 years.

Prepared by: The Insurance Federation of Minnesota January 2005

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