What kind of auto insurance do I need?
By law, everyone must purchase four coverages called Compulsory (or Mandatory) Coverages in, at least, the minimum amounts required by law, and in higher amounts if you choose to do so. These coverages help to pay for bodily injury or property damage arising from a car
accident.
- Bodily Injury to Others pays for injuries you caused to someone else while operating
your car. You must buy at least $25,000 per person and $50,000 if more than one person
is hurt. - Personal Injury Protection (also known as PIP) covers medical expenses for you and
certain others if you’re in an accident plus other related expenses including, but not
limited to, up to 75% of lost wages and replacement services, up to a limit of $8,000. - Bodily Injury Caused by Uninsured Auto pays for your injuries caused by an uninsured or
unidentified ("hit and run") driver. You must buy at least $25,000 per person and $50,000
total for all people injured by the uninsured auto in the accident. - Damage to Someone Else’s Property, also known as Property Damage, pays for damage
to another person's property when you are at-fault for an accident. You must purchase a
minimum limit of $30,000.
How does the insurance company decide how much I pay for my coverage?
Insurance companies group you with other people who share your general risk characteristics -such as the number of years’ driving experience, the vehicle you drive, and where you live. To calculate your individual premium (how much they will charge you), the company uses a base rate for your group, then adjusts it to reflect your individual risk factors such as your driving record and any discounts for which you are eligible. They collect enough premiums to cover expected future losses (which they determine by past and prospective loss experience and
expenses) and expenses and other items. As the number of claims and the costs of those claims increase, so does the cost of insurance.
Why do some people have “comp and collision” on their policy and others don’t?
Comprehensive and Collision coverage are optional coverages. You are not required by law to purchase them, and your total premium will increase if you buy these coverages because you are buying extra protection. Comp pays for damage caused by something other than a collision, such as flooding, fire and theft, falling branches or contact with an animal. Collison pays for damage caused by the physical contact of your auto with another object, such as another vehicle, a guard rail, or a wall.
How do accidents and driving violations affect how much I pay for insurance?
Your insurer is required to report all at-fault accidents where they pay more than $1000.00 in claims on your behalf to the Merit Rating Board (MRB). The MRB is a state agency that maintains operator driving history records. Your insurance company looks at your driving record and uses its own merit rating plan to determine if and how they will impose surcharges on your premium for at-fault accidents and traffic violations. Insurance companies can only use accidents and surcharges you may have had within a 6-year period but having an incident-free driving history (meaning no accidents or traffic violations) will always result in a lower premium, all else equal.
Can my insurance company add drivers to my policy without my permission?
You are required to tell the insurance company about all the people who drive your car on a regular basis. If your insurer determines that someone should be added to your policy, they can do so but they must tell you and give you an opportunity to refute their rationale or evidence.
Is my insurance company required to notify me if they cancel or non-renew my policy?
Yes. Your company must send you a notice at least 20 days prior to the effective date of the cancellation and 45 days prior to the expiration of your policy if they are non-renewing you. You can also change insurance companies at any point! Just make sure that you have coverage in place with another company, so you do not get penalized by the RMV for not having insurance.
My auto was declared a total loss following an accident. Is my insurance company required to give me the full amount to replace my car?
A total loss means that the cost of repairing the car exceeds the current value/worth of the vehicle. When this happens, your insurance company will only give you the actual cash value of the car as of the date of the loss, not the cost to replace it.
Your car’s value is determined by the following factors:
- the retail value for an auto of like-kind and quality prior to the accident
- the price paid for the auto plus the value of prior improvements to the auto at the time of the accident, less appropriate depreciation.
- the decrease in value of the auto resulting from prior unrelated damage which is detected by the appraiser or for which a claim has been paid, the actual purchase cost of an available auto of like kind and quality.
Insurance companies can pick their own sources form which they derive their “total loss equations” from, such as NADA and Kelly Blue Book, and you have the right to ask the insurance company for their sources. If you disagree with the amount the company is offering,
you can attempt to negotiate, but remember, the vehicle must be of like kind and quality, meaning if your vehicle is an older model year, you can’t compare it to a more recent model year. You also have the right to go to arbitration if you disagree with the amount the company is offering, and you can’t reach an agreement.
What is GAP insurance?
GAP (Guaranteed Asset Protection) insurance covers the difference between your auto loan or lease balance and the settlement your insurance company pays if your vehicle is totaled or stolen. Without it, you could still owe money on a car you no longer have. GAP coverage is
often offered at the dealership when financing, but many insurance companies also provide it as an optional add-on or endorsement to your policy.
My windshield cracked. Will the insurance company replace it for free?
If you have comprehensive insurance you are covered for the full amount of the loss, minus the amount of any glass deductible you may have selected. While many companies default to having no glass deductible, a glass deductible is permissible in Massachusetts. Your auto policy’s declarations page will identify any deductibles you have, or you can ask your insurer.
I don’t have comp and collision on my policy, and I was at-fault for an accident/ had a single vehicle accident. Can my insurer deny my claim?
These optional coverages provide for payment if you are at-fault for an accident or if an animal ran out into the road or a tree branch fell onto your car. Because you haven’t been paying the insurance company for this coverage, they aren’t required to cover the loss. If you are in an accident and the other party is at-fault, then their property damage coverage (which is a mandatory liability coverage) will be used to pay or help pay for the damage to your car that they caused. Keep in mind that if your vehicle is older and isn’t worth much, it may not be in your best interest to purchase these coverages since you wouldn’t get a significant payment in the event of a total-loss anyway. It may be helpful to consult your agent if you have any questions on whether you should purchase these two coverages.
I was in an accident and can’t replace my vehicle until the insurance company settles the claim. How long can the insurance company take to give me my money?
There are no specific time limits for the settlement of claims. Insurance companies legally must pay all claims in a prompt and reasonable amount of time. However, a "prompt and reasonable" amount of time may be different for each claim. Some claims that need a more thorough investigation may take longer to figure out. You can always file a complaint with our Consumer Service Unit if the company is not being responsive or dragging their feet.