Massachusetts Car Insurance

Required coverages (types) for Massachusetts auto insurance, and the required minimum limits (dollar amounts) for each coverage.

Required Coverage
 Required Minimum Limit  Bodily Injury to Others $20,000 per person; $40,000 per accident; Personal Injury  Protection (PIP) $8,000 per person, per 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

 
In order to register and drive your vehicle in Massachusetts, you are required to at least purchase the auto coverages and limits shown above.  Your auto insurance policy must list all licensed drivers living in your household who are related to you by blood, marriage, or adoption, including drivers already covered by their own insurance policies.  You should also list any person who occasionally drives your car.  While the policy only requires you to list “customary” operators, insurers often interpret this term broadly, and some require that you list anyone who may use your vehicle.

Drivers who have their own policy, should be listed on your policy as “deferred operators.”  Their addition will not affect your premium.  You may exclude any household member who does not drive your car, but in order to do so, you must submit an “exclusion form” to your insurance company.  Drivers who only have a Learner’s Permit are not required to be listed on your policy until they are fully licensed.

If you fail to list any “customary” operator or licensed household member, your insurance company might refuse to pay your claim, even if you were driving at the time of the accident.

The Massachusetts auto insurance system is changing for consumers who buy or renew their insurance policies on or after April 1, 2008. The Governor of MA and the Division of Insurance are deregulating the auto insurance market and implementing a system called “Managed Competition,” which means that insurers, for the first time, will set their own prices for auto insurance.  After April 1, 2008, companies will charge consumers different rates and calculate premiums based on factors that were not used in the past.  As a result, some people will be charged more, others less, and each insurance company will offer you a different price.  Because of the wider array of prices, coverages, discounts, and benefits that will be available under Managed Competition, all Massachusetts residents who renew or begin an auto insurance policy on or after April 1, 2008, should shop carefully for auto insurance.Under Massachusetts’ old auto insurance system, you would be charged similar premiums regardless of which insurance company you chose.  Any differences in the premiums charged by insurance companies related largely to the discounts offered by different insurers.

Under the new Managed Competition system, premium amounts, rates, coverages, discounts, and benefits may vary widely by insurer and will be based on an assortment of new rating factors.  As a result, you will have to shop carefully to find the coverages best suited to your needs and the best prices for those coverages.  In addition, insurance companies will not be required to offer some of the discounts that they were previously required to offer, such as the Public Transit, Multi-Car, and Driver Training discounts.  However, for now, most insurers will continue to offer these discounts and many new types of discounts may be available.

 MAIP
The Massachusetts Automobile Insurance Plan (MAIP) is an insurance plan for drivers who cannot obtain insurance in the voluntary market.  If you cannot find an insurance company willing to write you a policy, you will be assigned to an insurer through the MAIP.

MAIP is the way you are assigned to one of the existing automobile insurers if you have been unable to find coverage on your own. Every company licensed to sell private passenger automobile insurance in Massachusetts must  also participate in the MAIP by acting as an Assigned Risk Company (ARC).  Consumers who cannot obtain insurance in the voluntary market are assigned to an ARC by the MAIP.  For the most part, these ARCs are the same companies that you will see selling insurance in the voluntary market.  The only difference is each company has some drivers they insure voluntarily and other drivers that are assigned to them through the MAIP.

The MAIP is administered by Commonwealth Automobile Reinsurers (CAR) according to rules that are approved by the Division of Insurance.  The coverage and service provided to you by the ARC will be comparable to coverage provided to drivers in the voluntary market.  The ARC must charge the consumer the lower of the MAIP premium rate or the ARC’s voluntary premium rate.  

You will try to find coverage on your own in the voluntary market – either through an agent or directly from a company.  If no company is willing to write coverage for you, any insurance agent can submit an application for insurance to the MAIP.  The MAIP will then assign the application to one of the Assigned Risk Companies and insurance will be provided to you by that company.  If an agent submits a MAIP application for you, that agent will continue to service your policy regardless of which Assigned Risk Company receives your policy.

Your agent will tell you when you have been assigned to a company through the MAIP.  In some cases, your agent may fill out a MAIP application before you receive official notification that you have been denied coverage in the voluntary market.  You will always receive written notice any time you are denied coverage.

Any time a company denies your application for automobile insurance in the voluntary market, it must inform you in writing.  This letter must include the reasons for their denial.  Different companies might deny your application for different reasons, so these letters might list different reasons from company to company.

The period between April 1, 2008 and March 31, 2009 is a “transition period,” during which the full operation of the MAIP gradually will be phased-in. Even though the MAIP will not become fully operational until April 1, 2009, if you cannot obtain insurance on a voluntary basis, you always will be able to obtain insurance from some insurance company unless:

    * Any person who usually drives your motor vehicle does not hold or is not eligible to obtain an operator’s license or fails to obtain such license as required by law;
    * Any person who usually drives your motor vehicle has failed to pay an insurance company any motor vehicle insurance premiums due or contracted during the preceding twelve (12) months; or
    * With respect to physical damage insurance, you have failed to make your vehicle(s) available for inspection as required by Massachusetts insurance regulations.

The placement of drivers through the MAIP began April 1, 2008, and is limited to the following types of drivers who are declined insurance on a voluntary basis:

    * A newly licensed driver applying for his or her own policy;
    * A driver who has not been insured in Massachusetts in the twelve (12) months preceding the application for insurance coverage; or
    * A driver who has ten (10) or more merit rating points, as determined by the MAIP rate manual rules.

Starting on April 1, 2009, any driver can be referred for assignment through the MAIP.

If you are denied insurance on a voluntary basis during the MAIP transition period from April 1, 2008 to March 31, 2009, but are not eligible for placement with an insurance company through the MAIP, you still will be able to obtain motor vehicle insurance.  You will need to go to an Exclusive Representative Producer (“ERP”), a special kind of insurance agent.  The ERP will be able to obtain motor vehicle insurance for you.