What You Should Know About Auto Insurance

Do you need it?

Yes – by law, in the state of Massachusetts, you have to purchase four basic coverages, called Compulsory Coverages, with the following minimums:

  • Bodily Injury to Others: $20,000 per person – $40,000 per accident.
  • Personal Injury Protection (PIP): $8,000 per person in an accident.
  • Bodily Injury Caused by an Uninsured Auto: $20,000 per person – $40,000 per accident.
  • Damage to Someone Else’s Property: $5,000 per accident.

PIP coverage will cover car-accident related injuries to you or your passengers, regardless of who was at fault, up to the limit of liability. Keep in mind,  PIP value cannot be increased beyond 8k, but you can purchased medical payments up to $100k with some carriers

Is Compulsory Coverage Enough?

No. The compulsory limits of liability are insufficient, and they will likely be eaten up by attorney’s fees alone. Not to mention the potential for bodily injury damages paid to claimants.

Beyond just physical damage to your own car, we recommend adding optional bodily injury, uninsured auto, and underinsured auto of a minimum of 50/100 for renters and 250/500 for homeowners. Umbrella coverage can also be secured for those who have high net worth or at a higher risk. (ie: newly driving children)

There’s a variety of Optional Coverages available to increase your protection, for example:

Collision – Covers damages to your vehicle caused by a traffic collision.

Comprehensive – Covers non-collision-related incidents, like damages to your vehicle caused by severe weather.

Rental Car Coverage – Pretty self-explanatory.

As of April 1, 2009, insurance companies are no longer responsible to voluntarily offer insurance to Massachusetts drivers. That means it’s possible you could be turned down for coverage. However, if you cannot secure coverage, you are eligible to apply for insurance through the Massachusetts Auto Insurance Plan (MAIP).

Keep in mind, MAIP will randomly assign you to an insurance company, and the cost of the MAIP-assigned insurance may be higher than the price you could have found yourself, if you had continued to shop around.

How Do Insurance Companies Calculate Premiums?

Each insurance company has their own formula for calculating premium prices, but they basically use the same basic factors; the make and model of the car, how the vehicle is used, garaging, years licensed, driving record, etc.

Other factors could include; age, gender and marital status: Stats show that younger, less experienced, and male drivers are more likely to have an accident.

In 1956, the National Interstate Highway System was created, and during the next 50 years, 46,876 miles of highways were built across America.

Insurance Terms You Should Know

Here are some terms you should know when insuring your car:

  • Accident: The unexpected or unforeseeable event.
  • Premium: Your payment to maintain your car insurance policy.
  • Claim: The application you make to your insurer after an accident.
  • Risk: The likelihood of making a claim that the insurer will have to pay out. This varies between providers.
  • The Massachusetts Automobile Insurance Plan: The MAIP is the way you get insurance if you can’t get an auto insurance policy in the voluntary market.

Not everyone on the road shares your good driving habits, and no matter how careful you are when you drive, you can’t always prevent an accident from happening. Even if you escape the accident unhurt, you can still face financial issues because of lost time or missed work, so having the right Massachusetts auto insurance company (aka – us) will ensure you have a great auto insurance policy, good rates, and excellent service.