Understanding Your Massachusetts Auto Insurance

This article has been prepared by the Law Offices of Donald M. Hadge as a public service in an attempt to provide very important information that should be understood and considered in connection with your purchase or renewal of your automobile insurance in Massachusetts.  The information and suggestions in this article can be put into effect immediately; you need not wait until the renewal or purchase of your automobile insurance. The Law Offices of Donald M. Hadge will be happy to meet with you – free of charge – to review your existing automobile/motorcycle insurance coverage and make recommendations that you can follow-up with your insurance agent.

Since our law office handles a considerable amount of personal injury claims, a great deal of which come from automobile and motorcycle accidents, we believe that we have had the opportunity to understand the consequences of your insurance coverage from a unique point of view.  In the course of representing our clients in their personal injury claims, one of our tasks has been to review the existing insurance coverages for their vehicles, often because the responsible party in the accident either has no insurance or not enough insurance.

Unfortunately, we often find that those coverages that our clients could have purchased to protect themselves and their family members in the event of a serious accident have not been purchased.   This lack of coverage particularly upsets our clients when they learn that these coverages were available for a cost that was very affordable in light of their total premium costs.

Since our office knows the impact of inadequate coverage, we are taking this opportunity to provide this information regarding the various coverages available through your Massachusetts auto insurance policy, so that in the event that you are injured, you will have an adequate amount of insurance coverage.  The topics that are discussed below involve those coverages that we believe will best benefit you in the event that you have a personal injury claim:

1.  Item No. 3 – Uninsured Coverage:  This coverage is available to provide you with benefits for those accidents in which the responsible party either cannot be identified or has no insurance.  It is alarming to realize that there are great deal of drivers on the roads of Massachusetts who simply are driving without any insurance at all.  As a result, this places the burden on you to protect yourself in the event that you are injured.  Often these same people that have no insurance also have no assets so that your only ability to be compensated for your injuries and to receive reimbursements for your lost wages, medical expenses and other expenses would be to make a direct claim under your own insurance policy.  This coverage will also provide benefits to you in the event that you are injured while a pedestrian.  Many people that we have spoken with had no idea that benefits could be available to them under their automobile in the event that were injured as a pedestrian.  As noted above, this coverage is identified as “Item No. 3” on your Coverage Selection Page sent to you by your automobile insurance company.  Under current law, the minimum amount which would be placed in this coverage is $10,000/$20,000 according to the 1989 legislation which significantly changed the rights of Massachusetts auto insurance consumers.  The benefits are scheduled to increase a small amount beginning in 1991.  This minimum compulsory amount which is available is not adequate.  At the very least, we believe that the minimum amounts which you should have in place under your automobile insurance policy is $100,000/$300,000.  The importance of this coverage cannot be over emphasized, since among other things, it is your opportunity to protect yourselves and your loved ones, against drunk drivers, reckless drivers and those people driving on the roads of the Commonwealth of Massachusetts who otherwise have no concern for your safety.

2.  Item No. 12 – Underinsurance:  This coverage is similar to uninsured coverage in that it again provides you with an opportunity to purchase insurance benefits which will protect you in the event that you are involved in an accident and the responsible party does not have sufficient insurance.  As a result of the new legislation that was passed in 1989, this coverage is no longer compulsory.  Under previous law, both underinsured and uninsured coverage were noted as Item No. 3 in the Coverage Selection Page.  There are probably just as many people who have inadequate insurance as those who have no insurance at all.  Also, just as with the uninsured coverage, this coverage will provide  benefits to you in the event that you are injured while a pedestrian.  There is an additional cost for purchasing underinsurance since it is now a separate item on your coverage selection page, but the protection afforded by this coverage is very valuable, and it is your only opportunity to insure yourself against unforeseen injuries and possibly more serious tragedy.   This underinsurance can be purchased beginning with an amount of $10,000/$20,000, but again, we believe that the minimum amounts which you should have in place with regard to your automobile is $100,000/$300,000.

Additional Note Regarding Underinsured and Uninsured Coverage-Trigger Mechanism/Anti-Stacking Provisions:  One additional factor which must be understood in your purchase of underinsured and uninsured coverage is the “trigger mechanism/anti-stacking provisions” which were passed in the 1989 legislation.  This legislation was anti-consumer  took away many benefits as well as increasing the costs of other benefits.  Needless to say, your so-called Afriendly insurance companies@ supported this legislation.  Prior to the 1989 legislation, you could always avail yourself of the coverage which you had purchased under these categories regardless of the amounts which were paid by the responsible party and even if you only had the minimum coverage.  Under the new legislation, you can only benefit from underinsured coverage if your under- insurance exceeds the amount paid to you by the responsible party.  If it is equal to or greater than the amount or less than the amount which you receive, then you cannot benefit at all from this coverage.  Again, this is why buying the increased amounts of coverage is important.  Also, previously it was possible to “stack” (add-up) the coverage of all the policies in the same household to obtain benefits (both under the underinsured and uninsured categories) from all of the vehicles.  This benefit has also been removed by the 1989 legislation, which is clearly anti-consumer, but was passed under guise of saving premium costs.

3.  Item No. 6 – Medical Payments:  Your automobile insurance also provides you with a coverage known as medical payments which will pay for medical expenses incurred in connection with injuries which you received in connection with an automobile accident.  However, the circumstances under which you may receive these payments are varied and not limited to those expenses incurred while you are riding in your own motor vehicle.  Some of the more important instances where this coverage would benefit you are as follows:

  • While you are a passenger or operator in your own motor vehicle;
  • While you are a passenger or operator in a vehicle other than one which you own
  • While you are a pedestrian.

Medical payments coverage is of extreme importance to motorcyclists, especially because motorcycle insurance coverage does not provide “PIP – No-Fault” benefits, and also because injuries sustained in motorcycle accidents can often be much more severe, and therefore the accompanying medical bills are much higher.  The amount of medical payments coverage available begins at $5,000 and increases to approximately $25,000.

We would recommend the purchase of medical payments coverage even if you have a comprehensive private medical insurance plan.  The two most important reasons for buying medical payments are as follows:

  1. The cost of the coverage is reasonable in light of the benefits which you receive; and
  2. The existence of medical benefits will help reduce or eliminate a potential “medical lien” by the private health insurance carrier against your personal injury settlement.

It is important that you ask your insurance agent about the various amounts of coverage available and the cost for each coverage.

General Guidelines

This article has dealt primarily with those coverages which would protect and benefit you in the event that you suffer personal injuries in an automobile related incident.  However, we encourage you to understand all of the coverages available in your automobile insurance policy.  It is also important that you have adequate coverage against bodily injury and property damage claims against you.  In such an event not only must you have adequate insurance (which may include an umbrella policy) but also you should take steps to protect your assets by implementing other legal strategies including the filing of a Declaration of Homestead to protect your home.  It is important that you spend the necessary time with your insurance agent to understand the various coverages and the cost of each coverage.  We advise you to follow three simple guidelines:

  1. Understand the types of coverage and the benefits provided by that coverage;
  2. Know all of the amounts/levels of coverage available; and
  3. Know the costs to increase each amount/level of coverage.

If you follow the guidelines of this article you will have the ability to make more informed decisions about the purchase of automobile insurance.  Not only from the point of view of having adequate insurance, but also from the point of view of getting the most insurance for your premium dollar.

The Law Offices of Donald M. Hadge will be happy to meet with you – free of charge – to review your existing automobile/motorcycle insurance coverage and make recommendations which you can follow-up with your insurance agent.  It is our sincere hope that you will never have to use any of the benefits that are provided by your automobile insurance policy, but if you do, then having sufficient amounts of insurance coverage and good legal counsel will hopefully provide you with necessary tools to protect your interests.