How Car Insurance Works in Massachusetts

There are many states in the United States that require drivers to have automobile insurance, and Massachusetts is one of them. If you live in Massachusetts, you would not be able to register your vehicle unless you have proof of insurance to show when you go to the Department of Motor Vehicles (DMV). When your registration is due for renewal, you can do it online or through the mail. On the application, you would need to include your insurance information including the company, the policy number, and the effective dates.

When purchasing a car insurance policy, you have a few options based on the amount of coverage that you need and the amount of money that you are willing to pay. Before you purchase a policy, you should understand the Massachusetts car insurance laws.

Liability Insurance

To be allowed to drive in Massachusetts, liability coverage is the state-required minimum. In order to register a vehicle and legally drive, you must carry this insurance. If you are pulled over and you cannot show proof of insurance, you would be given a ticket during the traffic stop.

Liability insurance is broken up into four types of coverage, and you must carry the minimums on each.

  • Bodily Injury to Others: If you cause an accident and the driver or the passengers in the other car are injured, you would need to have at least $20,000 of insurance per person injured in the accident and $40,000 total per accident.
  • Personal Injury Protection: This insurance would cover your or your passengers’ injuries if you are in an accident, regardless of whose fault it is. You must have at least $8,000 per person in an accident that you caused.
  • Bodily Injury Caused by an Uninsured Auto: If you are hit by a Massachusetts driver who does not have insurance, or if they are underinsured, this type of coverage would cover any injuries sustained to you or your passengers. You would need to have at least $20,000 per person and $40,000 per accident.
  • Damage to Someone Else’s Property: If you are driving and you cause an accident to another driver’s vehicle or to another person’s home or something on their property, this type of insurance would cover it. You would need to have at least $5,000 per accident.  

For more information regarding the minimum requirements, visit http://www.mass.gov/ago/consumer-resources/consumer-information/auto-and-vehicle-insurance/understanding-insurance.html.  

Optional Insurance Coverage

If you want added protection, there are optional types of insurance that you can purchase. While you aren’t legally required to carry these types of insurance, if you are leasing your vehicle or if you have a car loan, you would be required to have collision and comprehensive insurance.

  • Collision: If you were to cause an accident, this added coverage would pay for the damage to your vehicle as well as the vehicle that you hit. When you have collision insurance, you won’t need to pay for your repairs out of your own pocket. It is necessary if you are still paying for your vehicle.
  • Comprehensive: This type of insurance would cover your vehicle if it is damaged in a non-collision traffic accident. For example, if your vehicle is damaged, if a tree falls during severe weather, or if a window is broken during a break-in, this insurance would cover the damages. If you are paying off an auto loan or if you are leasing your vehicle, you would need to carry comprehensive insurance.
  • Rental Car Coverage: This type of coverage is not required, even if you are paying off your auto loan or leasing your vehicle. If you are in an accident and your vehicle needs repair, this coverage would pay for a rental car while your vehicle is being fixed. Since most people depend on their vehicles for just about everything, this is an important coverage to have. It can save you hundreds of dollars if you are in an accident.
  • Towing: This is another coverage that is optional, even if you are paying off a loan or leasing a vehicle. If your car breaks down, this insurance would cover the cost of the tow. If you run out of gas, if you need to have your battery jumped, or if you have a flat tire, this coverage would pay for the roadside assistance to get you back on the road again.

Insurance Premium Costs

The amount of money that you would pay for insurance would depend on your previous driving history and your experience. In Massachusetts, this is called the SDIP merit-based rating system. If you are a new driver, you would automatically pay the highest premium because you have very little experience driving. Each time you get a traffic violation or are in a car accident, you will be given surcharge points. The more points you have, the higher your insurance premium will be.

If you prove that you are a safe driver by having no accidents or violations for five or six years, your points will go down, saving you money on your insurance premiums.

The make and model of your vehicle and your location can also affect your insurance premium rates.

The type of insurance that you buy will depend on the amount of coverage that you want or are required to have. It would also depend on your budget. For more information, visit https://www.mass.gov/service-details/automobile-insurance.