On the North Dakota Property & Casualty exam, the Personal Automobile Policy appears both as a standard ISO-style contract and as a set of North Dakota auto rules you must apply. This standalone guide reviews the policy's coverage parts, then drills into the North Dakota overlay: the commonly cited 25/50/25 financial-responsibility minimums, the fact that North Dakota is a no-fault state with mandatory PIP (basic no-fault) benefits and a tort threshold, the modified comparative negligence rule, and uninsured/underinsured-motorist requirements. The North Dakota-specific material is where most state credit is earned.

Policy structure (the national base)

The Personal Auto Policy (PAP) is a packaged contract organized into lettered parts:

• Part A — Liability: pays bodily injury (BI) and property damage (PD) the insured is legally liable for; the insurer provides a defense, and supplementary payments such as defense costs are paid in addition to the limit.
• Part B — Medical Payments: pays reasonable medical and funeral costs for the insured and passengers regardless of fault (in a no-fault state this role is largely filled by PIP).
• Part C — Uninsured/Underinsured Motorists: pays the insured's injuries when the at-fault party is uninsured or underinsured.
• Part D — Coverage for Damage to Your Auto: Collision and Other Than Collision (Comprehensive), each with a deductible, settled at Actual Cash Value (ACV).
• Part E — Duties After an Accident or Loss and Part F — General Provisions.

Limits may be written as split limits (e.g., 25/50/25) or as a Combined Single Limit (CSL). Insureds include the named insured, resident spouse, resident relatives, and permissive users—a friend who borrows the car with permission is generally covered. Eligible vehicles are private passenger autos, pickups, and vans not used mainly for business, and an owned utility trailer generally falls within the covered-auto definition for liability. That framework is national; North Dakota governs the limits and the liability environment around it.

North Dakota is a no-fault state

This is the headline North Dakota difference: North Dakota is a no-fault auto state. Each driver's own policy pays certain basic no-fault (Personal Injury Protection, PIP) benefits for the insured's injuries regardless of who caused the crash. PIP typically pays medical expenses, a portion of lost wages, essential services, and a funeral/survivor benefit up to the policy limits.

Because PIP pays first, North Dakota limits lawsuits with a tort threshold: an injured person may only sue the at-fault driver for pain and suffering / general damages when the injury crosses a statutory serious-injury threshold (for example, a stated dollar amount of medical expense, or death, dismemberment, permanent disability, or serious disfigurement)—verify the current threshold amounts. Below the threshold, the injured party stays within the no-fault system. Mandatory basic/PIP no-fault coverage is required alongside liability coverage in North Dakota.

Comparative negligence: the ~50% modified rule

When both drivers share blame and a tort claim is allowed, North Dakota applies modified comparative negligence. The rule to remember: a claimant's recovery is reduced by their own percentage of fault, but a claimant whose fault is as great as the other party's (roughly the 50% line) is barred from recovering anything—verify the exact statutory cutoff. Contrast this with pure comparative negligence (recovery with no cutoff) and contributory negligence (any fault bars recovery). Expect the exam to test that North Dakota is modified comparative around 50%, not pure and not contributory.

Financial responsibility: 25/50/25

Every North Dakota driver generally must show financial responsibility, usually by carrying liability insurance at or above the minimum split limits, commonly cited as:

• $25,000 bodily injury per person
• $50,000 bodily injury per accident
• $25,000 property damage per accident

Shorthand: "25/50/25" (verify the current statutory figures). These are statutory floors plus the mandatory no-fault/PIP and UM/UIM coverages; producers routinely recommend higher limits. After certain serious violations a driver may be required to file an SR-22, a certificate proving the required coverage is in force.

In a 25/50/25 limit, remember the order: the first number is BI per person, the second is BI per accident, and the third (25) is property damage per accident—don't slide the property-damage figure into a BI slot.

Uninsured and underinsured motorist rules

This is a heavily tested North Dakota area:

• North Dakota generally requires uninsured motorist (UM) and underinsured motorist (UIM) coverage on auto policies (at least at minimum limits)—verify current mandates and limits.
• UM responds when the insured is injured by an at-fault driver who has no liability insurance, and it also covers hit-and-run drivers.
• UIM applies when the at-fault driver has insurance but at limits too low to cover the insured's damages; it pays the gap up to the insured's UIM limit.
• The other driver must be legally at fault for UM/UIM to respond.

Optional and physical-damage coverages

• Basic no-fault/PIP is mandatory in North Dakota; additional Medical Payments may be offered, but PIP is the core first-party injury coverage.
• Collision pays for impact with another vehicle or object or upset of the auto; Comprehensive (Other Than Collision) pays for losses such as theft, fire, hail, vandalism, or hitting an animal. Both are optional but typically required by a lender.
• On a total loss, physical-damage coverage pays the vehicle's actual cash value at the time of loss—gap coverage is what pays the difference between ACV and a larger loan balance. A betterment deduction may apply when new parts leave the vehicle better than before the loss.
• A newly acquired auto is generally covered for a limited time if reported within the required period, and a named driver exclusion removes coverage while a specifically named person is driving.

Cancellation and nonrenewal

North Dakota regulates how an insurer may end a personal auto policy:

• Mid-term cancellation generally requires the insurer to give the policyholder the advance written notice required by law.
• Nonrenewal at the end of the term likewise requires advance written notice within the required time so the insured can find replacement coverage.
• On cancellation, the insurer keeps only the earned premium and refunds the unearned portion; when the insurer cancels, the refund is generally pro rata without penalty.

Required vs. optional coverages

Key North Dakota numbers to memorize

Common exam traps

• North Dakota is no-fault, not at-fault. Basic no-fault/PIP is mandatory, and lawsuits for pain and suffering require crossing the tort threshold.
• North Dakota uses modified comparative negligence (~50% bar)—not pure comparative and not contributory.
• 25/50/25—the $25k at the end is property damage; don't slide it into a BI slot.
• PIP pays regardless of fault; it is first-party coverage that pays before any tort claim.
• Hitting an animal is Comprehensive, not Collision.
• Total loss pays ACV; gap coverage (not the PAP itself) covers a larger loan balance.
• Liability defense/supplementary payments are paid on top of the limit (national rule that still applies in North Dakota).

Quick recap

• The PAP's Parts A–F structure is national; North Dakota sets the limits and legal framework.
• North Dakota is a no-fault state with mandatory basic/PIP benefits and a tort threshold that must be crossed before suing for pain and suffering.
• For allowed tort claims, North Dakota uses modified comparative negligence (~50% bar) (verify).
• Minimum liability is commonly cited as 25/50/25 (verify), plus mandatory PIP and generally UM/UIM.
• Total losses pay ACV, and physical-damage coverages are optional but lender-required.
• Mid-term cancellation and nonrenewal require the advance written notice the law specifies, with unearned premium refunded.