SF3940

Purpose

• To fund an automobile theft prevention program by creating a state surcharge on certain auto insurance policies and specify which vehicles are subject to the surcharge.

Main provisions

• Insurers must collect a surcharge of 50 cents per vehicle for every six months of coverage on each policy of automobile insurance that provides comprehensive coverage issued or renewed in Minnesota.
• The surcharge is not considered part of the insurance premium for any purpose, including premium tax or agents’ commissions.
• The amount of the surcharge must be clearly stated on the insured’s bill or policy declaration.
• The revenue from the surcharge must be remitted to the Minnesota commissioner of revenue to support the automobile theft prevention program described in section 65B.84.

Vehicle types and scope

• For purposes of this surcharge, a “policy of automobile insurance” is defined as in section 65B.14 and covers only specific vehicle types defined in section 168.002.
• Covered vehicle types include:
  • Passenger automobiles
  • Pickup trucks
  • Vans (excluding commuter vans as defined in section 168.126)
  • Motorcycles
  • Recreational vehicles
  • Fleets (as defined by statute)
• Exclusion: No vehicle with a gross vehicle weight (GVW) exceeding 10,000 pounds is included in the surcharge.

Financial and administrative details

• The surcharge revenue is directed to the commissioner of revenue for use in the automobile theft prevention program described in section 65B.84.
• The changes apply to Minnesota Statutes 2024 section 297I.11, subdivision 1, by amending the types of automobiles that trigger the surcharge and how the surcharge is treated in relation to policy premium.

Significance and impact

• Shifts funding for the automobile theft prevention program to a mandatory, per-vehicle surcharge on certain comprehensive auto insurance policies.
• Narrows the vehicle types subject to the surcharge and excludes heavier vehicles, potentially affecting which policies are charged.
• Clarifies that the surcharge is separate from premium and must be clearly disclosed to consumers.

Relevant Terms - surcharge - 50 cents per vehicle - six months of coverage - comprehensive coverage - policy of automobile insurance - premium - premium tax - agents commissions - separately stated - billing or policy declaration - commissioner of revenue - automobile theft prevention program - section 65B.84 - Minnesota Statutes 2024 section 297I.11 - policy definitions (65B.14, 168.002) - vehicle types: passenger automobile, pickup truck, van, motorcycle, fleet, recreational vehicle - gross vehicle weight (GVW) limit (10,000 pounds)