How is my Premium Calculated?
Massachusetts drivers do have the ability to lower their auto insurance premium by shopping around, driving safely, choosing appropriate coverage, and taking advantage of discounts.
To calculate your premium, insurance companies consider your years of driving experience, the number and type of your at-fault accidents, the number and type of your traffic violations, the vehicle you drive and the principal place where you garage that vehicle. Insurance companies may also consider other risk factors if those factors are relevant to risk and approved by the Commissioner.
Prohibited Underwriting and Rating Factors
Insurance companies may not use certain factors for either underwriting or rating under Massachusetts law. Underwriting is the company's process of deciding whether or not to accept your business and issue you a policy. Rating is the company's process of deciding how much premium to charge you. Insurers cannot use sex, marital status, race, creed, national origin, religion, age (except for safe drivers who are 65 years or older), occupation, income, education, and home ownership in the underwriting or rating process.
Insurers may use the principal place of garaging in determining your rate, but not for underwriting. Insurance companies may not use credit information from consumer reporting agencies for either underwriting or rating.
Saving Money
Coverage Choices
Drivers can often lower their premium by thinking about which optional coverages they really need and the level of coverage that best fits their situation.
PIP Coverage
You can save on your premium by excluding yourself, or yourself and household members from some or all of this coverage. You should consider this option if you have a medical and disability income plan. The portion of each claim not covered is called a "deductible."
Collision and Comprehensive
If you have a car of low dollar value, it may be a wise economic choice not to buy the Collision or Comprehensive coverage unless your lender requires it.
Medical Payments
You should consider carefully your choice to purchase medicalpayments insurance if you already have health insurance. Your medical payments insurance may not be necessary if you have health insurance.
Substitute Transportation
If you can afford to take a cab or rent a car when your car is in the shop for collision repairs, you may not need Substitute Transportation coverage.
Towing & Labor
If you belong to a Motor Club, you probably do not need this coverage since many Motor Clubs' services include towing and labor.
Selecting Your Deductible
Your deductible will be set at $500 unless you select a different amount. You can always save on your premium by choosing a larger deductible where one is offered. In determining the right deductible for you, decide how much you can afford to pay out of your own pocket in the event of an accident or loss in which you are at fault, or the other driver is unidentified.
Individual Discounts
Insurance companies offer a variety of ways to reduce your premium. While there are some discounts that are required by law - such as discounts for drivers who are 65 years or older - companies may have other savings tied to driver-training, multiple cars on the same policy or other factors that reduce either the risk or extent of injuries or damage. The amount of these savings may vary somewhat from company to company. When shopping for your new policy, be sure to find out what factors may reduce your premium for each company.
Group Marketing Programs
In recent years, many insurers have been offering reduced rates to members of certain groups. In addition, many group plans do not charge interest or require an initial deposit.
Groups can be sponsored by an employer, civic organization, motor club, association, trade union, credit union, etc. You may want to check with agents of several different insurers to learn which groups the insurer has been approved to offer discounts to and the size of the discounts. Any member of an approved group is eligible for the group savings.