For the North Dakota Personal Lines exam, the Personal Auto Policy (PAP) is tested two ways: the national policy structure and the North Dakota auto rules layered on top of it. This standalone guide walks through the lettered parts every PAP uses, then focuses on the North Dakota rules an agent applies every day—the no-fault system with mandatory PIP and a tort threshold, financial-responsibility minimums, the modified comparative negligence rule, the uninsured- and underinsured-motorist requirements, and how policies can be cancelled or nonrenewed. Spend your study time on the North Dakota overlay; that is where the state questions live.

The national fundamentals (quick version)

The Personal Auto Policy insures individuals and families for the vehicles they own and drive. It is divided into clearly labeled parts:

• Part A — Liability Coverage: pays for bodily injury (BI) and property damage (PD) the insured is legally responsible for, with a duty to defend and defense costs paid on top of the limit.
• Part B — Medical Payments: pays reasonable medical and funeral expenses for the insured and passengers regardless of fault (in North Dakota, first-party injury costs are mostly handled by PIP).
• Part C — Uninsured/Underinsured Motorists (UM/UIM): pays your injuries when the at-fault driver has no insurance or too little.
• Part D — Coverage for Damage to Your Auto: Collision (impact or upset) and Other Than Collision (Comprehensive) (theft, fire, hail, hitting an animal), each with a deductible, paid at Actual Cash Value (ACV).
• Part E — Duties After an Accident or Loss and Part F — General Provisions set the rules.

An insured generally includes the named insured, the resident spouse, resident family members, and anyone using the covered auto with permission. The policy also extends the named insured's liability coverage to a non-owned auto the insured borrows with permission. Eligible vehicles are private passenger autos owned by individuals and households, not commercial trucks or buses. That skeleton is the same nationwide; North Dakota changes the dollar limits and the legal environment around it.

North Dakota is a no-fault state

North Dakota follows a no-fault system rather than a pure tort system. After a crash, each driver turns first to their own policy's basic no-fault (Personal Injury Protection, PIP) benefits, which pay the insured's medical bills, part of lost wages, essential/replacement services, and a funeral/survivor benefit—all regardless of who caused the accident. Because of this, basic no-fault/PIP coverage is mandatory in North Dakota, sitting alongside the required liability coverage.

The trade-off for guaranteed PIP benefits is a limit on lawsuits. North Dakota applies a tort threshold: an injured person may only sue the at-fault driver for pain and suffering once the injury crosses a statutory serious-injury threshold—for example, a stated dollar amount of medical expense, or death, serious permanent disfigurement, dismemberment, or permanent disability—verify the current threshold figures. Minor injuries stay inside the no-fault system and are paid by PIP.

Modified comparative negligence

When a tort claim is allowed and both drivers share blame, North Dakota uses modified comparative negligence. Each party's recovery is reduced by that party's own percentage of fault, but a claimant who is as much at fault as the other party (roughly the 50% line) recovers nothing—verify the exact statutory cutoff. This differs from a pure comparative system (recovery at any percentage of fault) and from a contributory system (any fault at all bars recovery). Remember: North Dakota is modified comparative, around 50%.

Financial responsibility: the 25/50/25 minimums

North Dakota drivers must demonstrate financial responsibility, almost always by buying liability insurance meeting the state's minimum split limits, commonly cited as 25/50/25:

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

Agents say this aloud as "25/50/25" (verify the current statutory figures). On top of liability, North Dakota requires basic no-fault/PIP and generally UM/UIM coverage. These are bare-minimum floors—most clients should buy more to protect their assets. After certain serious violations a high-risk driver may be required to file an SR-22 certifying that the required coverage is in place. A driver who cannot find coverage in the voluntary market may obtain it through the state's automobile insurance / assigned-risk plan (verify the current program).

Uninsured and underinsured motorist coverage

Here is a point North Dakota agents must apply: the state generally requires UM and UIM coverage on auto policies (verify limits and mandates).

• Uninsured Motorist (UM) bodily injury coverage responds when the insured is injured by an at-fault driver who carries no liability insurance, including a hit-and-run driver.
• Underinsured Motorist (UIM) applies when the at-fault driver has insurance but at limits too low to cover the insured's damages.
• UIM pays the difference between the other driver's lower BI limit and your UIM limit, so a client with strong UIM is protected even against a bare-minimum at-fault driver.

The recurring theme: in North Dakota UM/UIM is generally required, and these coverages respond only when the other driver is legally at fault.

Coverages, limits, and loss settlement

• In a 25/50/25 limit, the third number (25) is the property-damage liability limit per accident; the first two are BI per person and per accident.
• Basic no-fault/PIP pays first-party injury costs regardless of fault; collision pays impact/upset damage; comprehensive pays theft, fire, hail, vandalism, and animal strikes.
• The deductible is the amount the insured pays before the insurer covers the rest of a covered physical-damage loss.
• Transportation expenses / rental reimbursement helps pay for a rental while the covered auto is repaired after a covered loss, and towing and labor coverage pays roadside costs up to a stated limit.
• Exclusions to remember: organized racing for prize money is excluded, as is intentional or business use beyond the policy's scope.
• After a loss the insured's duties include promptly notifying the insurer and cooperating in the investigation. The named insured may cancel the policy at any time by notifying the insurer.

Cancellation and nonrenewal notice

North Dakota limits how and when an insurer can end a personal auto policy:

• Mid-term cancellation generally requires the insurer to provide the policyholder the advance written notice the law requires.
• Nonrenewal (declining to continue at the end of the term) likewise requires advance notice within the required time, so the insured can shop for replacement coverage.
• On cancellation the insurer retains only the earned premium and refunds the unearned portion; an insurer-initiated cancellation refunds pro rata without penalty.

Required vs. optional coverages in North Dakota

Key North Dakota numbers to memorize

Common exam traps

• North Dakota is no-fault, not at-fault—basic no-fault/PIP is mandatory, and pain-and-suffering suits require crossing the tort threshold.
• North Dakota uses modified comparative negligence (~50% bar)—not pure comparative and not contributory.
• 25/50/25—don't transpose the $25k property-damage figure into a bodily-injury slot.
• PIP pays regardless of fault and pays before any tort recovery.
• Hitting an animal is Comprehensive, not Collision.
• Collision/Comprehensive pay ACV on a total loss; the deductible is the insured's share first.
• Liability defense costs are paid in addition to the limit (national rule that still applies in North Dakota).

Quick recap

• The PAP keeps its national Parts A–F structure; North Dakota changes the limits and legal context.
• North Dakota is a no-fault state with mandatory basic/PIP benefits and a tort threshold before a pain-and-suffering lawsuit is allowed.
• For permitted tort claims, North Dakota uses modified comparative negligence (~50% bar) (verify).
• Financial-responsibility minimums are commonly cited as 25/50/25 (verify), plus mandatory PIP and generally UM/UIM.
• Physical-damage coverages are optional but lender-required, and total losses pay ACV.
• Mid-term cancellation and nonrenewal require the advance written notice the law specifies, with unearned premium refunded.