Massachusetts Car Insurance Myths

What’s true and what’s false about Massachusetts car insurance? HUB International provides the real facts about five common myths – Part I

There are a lot of interesting beliefs out there about car insurance.

For instance, have you ever heard someone say that you shouldn’t buy a red car because it will cost more to insure? (Well, it doesn’t.) Or, maybe you were once told that you can rip up an out-of-state speeding ticket because it will never follow you back to Massachusetts? (Fact is, it actually does.)

Here at HUB International we have fielded questions about these and pretty much every other car insurance myth out there. As your local insurance professional, we feel it is our responsibility to try to demystify this often puzzling coverage by providing the real facts about some of the most widespread misconceptions.

In this two-part blog series, we are going to set the record straight on five common myths about Massachusetts car insurance, starting with perhaps the most misunderstood car insurance concept of them all – our state’s minimum requirements for auto insurance coverage.

Massachusetts Car Insurance Myth #1

The minimum auto insurance levels required by Massachusetts are all you need to protect your vehicle, passengers, and yourself in case of an accident.

The Facts

It is true that Massachusetts drivers are only required to purchase four different types of auto insurance coverage with the following minimums:

• Bodily Injury To Others, which pays for injuries to other people (but not you or your passengers) as a result of an accident caused by you, a family member, or a person using your car with your consent, but only if the accident occurs in Massachusetts.
  • Minimum Required Coverage – $20,000 per person/$40,000 per accident. No higher limits can be purchased.
• Personal Injury Protection, which covers three types of costs for you or someone else injured in the accident – medical expenses, lost earnings, and replacement services (something you used to do for your household, but due to your injuries are no longer able to do, and thus you had to hire someone to perform these duties) – regardless of who is at fault.
  • Minimum Required Coverage – $8,000. No higher limits can be purchased.
• Bodily Injury Caused By An Uninsured Auto, which covers you and any passengers in your car, as well as any relatives who live you, if injured in an accident where an uninsured driver/vehicle is at fault or if the incident is a hit-and-run.
  • Minimum Required Coverage – $20,000 per person/$40,000 per accident. Higher limits can be purchased and it is highly recommended you do so.
• Damage To Someone Else’s Property, which pays for any damages you cause to the property of others due to an accident.
  • Minimum Required Coverage – $5,000. Higher limits can be purchased and it is highly recommended you do so.

These minimum requirements might initially sound quite broad and generous; however, it’s critical to understand that these minimums haven’t changed for over 20 years, while medical and legal costs, as well as car prices, have continued to rise exponentially. Which means that, in the event you are ever involved in a car accident, just having the minimum required coverages could leave you in a big financial hole.

For example, if you are involved in an at-fault, multi-car accident in which several other drivers suffer injuries that require medical attention, how far do you think $40,000 of Bodily Injury To Others coverage is going to go when you can only use $20,000 per person? The answer is – not far.

Ambulance rides alone can be upwards of $2,000 each. Add to that the exorbitant costs of emergency room visits, physician and hospital charges, and any fees for procedures, and you could be looking at a six-figure medical claim. And, we haven’t even discussed the additional legal fees you could face should one or more of the injured parties decide to sue you because they suffered a severe disfigurement or permanent disability. Almost 50% of drivers responding to an Insurance Research Council (IRC) study reported that they had hired an attorney to settle an auto injury claim, with the majority saying that they did so in order to get the absolute highest settlement possible!

In addition, in this type of accident, you could be on the hook for the damages to the other vehicles and any other property of others (e.g. a fence) that was involved. Remember from above that Massachusetts’ minimum property damage coverage is $5,000; however, if you are found liable for causing one or more cars to be totaled or seriously damaged, then this amount of coverage will seem insignificant. That’s because the average new car today costs almost $35,000, according to Kelley Blue Book and Edmunds data, and used car prices have hit an average of nearly $20,000. Not only are there more expensive cars on the road today than ever before, but these vehicles are also costlier to repair after an accident because they are loaded with high tech driver safety and assistance systems. In fact, even a minor accident, where you collide with the front or rear end of a vehicle equipped with automatic emergency braking, lane departure warning and blind spot monitoring, can land you a bill far beyond the $5,000 minimum coverage.

Aside from clearly being inadequate and outdated, Massachusetts minimum auto insurance requirements leave out critical coverage’s that HUB International recommends to all drivers, including:

• Optional Bodily Injury to Others, which extends your liability protection in multiple ways. Most important, it provides you with coverage for people you injure in a car accident that occurs outside of Massachusetts, anywhere in the U.S. and Canada.
  • Without It – Your insurance is not going to provide coverage for an accident that happens in Connecticut, New York, New Hampshire, Vermont, Maine, or wherever you are traveling outside of the Bay State.
• Bodily Injury Caused By An Underinsured Auto, which covers you and your passengers if injured in an accident caused by a driver who doesn’t carry enough bodily injury coverage to pay for your loss.
  • Without It – You could end up having to pay the difference between what you collect from the owner or driver of the at-fault vehicle and your actual injury-related expenses.
• Collision, which is coverage that will pay for damages to your car that are caused by a collision or rollover.
  • Without It – You could be stuck paying for repairs to your own vehicle out of your own pocket.
• Comprehensive, which protects your vehicle against non-collision-related incidents, including if a tree or other object were to fall on it, if you were to hit an animal with your car, or if your vehicle is broken into or vandalized.
  • Without It – You would not be able to file a claim for any resulting damages to your car, including cracked or broken glass.

We could go on and on about the reasons why all drivers should carry more auto insurance than just the state minimums, and we strongly encourage all our clients to do more to protect themselves, their loved ones, and other drivers on the road. Adding the optional coverages above is one way to not only expand the power of your coverage, but also to provide you with peace of mind at a very modest premium increase.

You can count on HUB International to give you the real facts about car insurance

Hopefully we have dispelled any previously held beliefs that Massachusetts minimum auto insurance coverage requirements are sufficient protection.

In the second part of this blog series, we will address four more of the most common car insurance myths that are out there. Our team will give you the real facts on Collision and Comprehensive coverage, when you should – and should not – file an auto insurance claim, the best way to deal with out-of-state traffic violations, and whether you can count on your insurance to pay off your remaining loan amount on your car if you total it.

We’re also sure you have other questions about your auto insurance, so please feel free to contact us for help understanding this complex coverage, to review your current policy, or for help making an informed decision about protecting your vehicles.