Minnesota lawmakers are taking steps to help low-income residents with a new auto insurance program. The proposed bill, known as HF 2215, aims to create the Minnesota Lifeline Insurance Program. This program would offer affordable auto insurance to people whose household income is no more than 300% of the federal poverty level, which is about $15,650 for an individual.
The bill, introduced by a group of 13 Democratic representatives, had its first reading last month in the Commerce Finance and Policy committee. If passed, the Lifeline Insurance Program would provide various benefits. These include a minimum of $5,000 for lost income due to accidents, coverage for bodily injury or death claims up to $30,000 for one person and $60,000 for multiple persons, and $10,000 for property damage. Additionally, it would offer uninsured and underinsured motorist coverage with limits of $25,000 for one person and $50,000 for multiple persons.
To ensure fair pricing, the program may divide the state into three geographic regions. Each region could set different premiums based on local costs, but no region’s premiums can exceed 25% more than another similar policy in the state.
To qualify for this insurance, applicants must show that all members of their household have health coverage. Furthermore, insurers would need to collect a small surcharge of 10 cents per vehicle every six months for each comprehensive auto insurance policy issued or renewed in Minnesota.
Insurance agents selling these policies would earn a commission of 12% of the policy premiums, with a minimum of $50 per policy.
Other states like California, Hawaii, and New Jersey have already implemented similar low-income auto insurance programs, highlighting a growing trend to make auto insurance more accessible for those in need.