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What Is Recommended for Car Insurance Coverage?

What Is Recommended for Car Insurance Coverage
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Massachusetts’s population has grown by 5.4% since the last US Census. Today, almost seven million people call the state home.

Along with this population growth is the rise in the number of owned vehicles in the Bay State. In fact, a study found that the number of household vehicles in Boston alone went up by 15% from 2012 to 2017. Statewide, each household, on average, owns two cars.

All these stats further highlight the importance of having auto insurance.

Why exactly is auto insurance essential, though? Also, what is recommended for car insurance coverage in MA?

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This post answers all these motor vehicle insurance questions (and a lot more), so please be sure to read on.

Why Do I Need Car Insurance?

For US motorists to drive legally, they must first demonstrate financial responsibility. Please note that all states have some form of financial responsibility laws in place. As such, drivers must be able to prove that they can pay for damages or liability if they cause an accident.

In most states, car insurance serves as proof of this financial responsibility. That’s why auto insurance is compulsory in almost all states, including Massachusetts.

It’s only in New Hampshire and Virginia where there’s an alternative to auto insurance. However, in these two states, motorists must still pay for any damages or injuries they cause.

In VA, motorists who choose not to insure a car can pay a $500 Uninsured Motor Vehicle (UMV) fee. This doesn’t provide any coverage, as it only permits them to operate an uninsured vehicle. They assume all risks in doing so, which means that they will still be liable if they cause an accident.

In any case, all motorists in Massachusetts must have car insurance to drive legally. However, this type of insurance is far from just being a legal requirement. Here are other reasons why you need to carry a valid motor vehicle insurance policy at all times.

It Protects Other People (and Their Property)

If you cause an accident, your car insurance will help cover the costs of bodily injury to other people. It will also help pay for the damages that the crash may cause to other people’s property.

Without auto insurance, you may face massive out-of-pocket expenses to cover these costs.

It Safeguards You and Your Finances

Auto insurance protects you from the liabilities mentioned above. Without it, you may have to cover all the costs that arise from a car accident using your own money. As such, car insurance also safeguards your financial well-being.

What Happens If I Don’t Have Car Insurance?

Please keep in mind that, on average, six million car accidents occur in the US each year. Three million people sustain injuries from these incidents. While not all crashes result in injuries or fatalities, 72% cause property damage.

As such, not having car insurance can lead to high out-of-pocket damage and liability costs. For example, property damages alone already cost an average of $4,500 per vehicle. Disabling injuries, on the other hand, have a staggering average economic cost of $96,200.

In addition, not having car insurance can also lead to severe legal penalties. In Massachusetts, for instance, a first offense for driving without insurance can lead to a fine of up to $500. The authorities will also enforce a 60-day license suspension.

Note that these are only for first-time offenses. There are heftier and more severe penalties for subsequent convictions.

There’s also the possibility of imprisonment, which applies to even first-time offenses. This can be an imprisonment term of not more than one year in a house of correction. However, the penalties may be a combination of fines and imprisonment.

What Car Insurance Coverages Should I Have?

Auto insurance laws vary from one US state to another, so please keep this in mind if you’re new to MA. One reason is that many states require only at least two types of coverage. In Massachusetts, though, there are four mandatory types of car insurance coverage.

These include the following:

  • Bodily Injury to Others
  • Personal Injury Protection (PIP)
  • Bodily Injury Caused by an Uninsured Auto
  • Damage to Someone Else’s Property

Each coverage type also has a limit. This refers to the highest or maximum amount that an insurer pays for in the event of a claim. In Massachusetts, there are mandatory minimum limits for each of the required coverages.

What’s the Minimum Car Insurance I Need?

Many states often express minimum car insurance requirements through a series of numbers. For instance, it may look like 25/50/25 in Alabama. These figures pertain to the minimum required car insurance limits in these states.

In the case of Alabama, here’s what the figures represent:

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident

Massachusetts, however, has six required limits. These include the following:

  • $20,000 bodily injury to others, per person
  • $40,000 bodily injury to others, per accident
  • $5,000 property damage (damage to someone else’s property, per accident)
  • $20,000 bodily injury caused by uninsured auto, per person
  • $40,000 bodily injury caused by uninsured auto, per accident
  • $8,000 personal injury protection, per person, per accident

Please note that before you can even register a car in MA, you need to purchase these coverages. Only then can you legally drive your vehicle in the Bay State.

How Do Property Damage and Bodily Injury Liability Work?

These required coverages protect you from liabilities if you cause an accident. They help pay for the damages or medical costs that you may cause to other people.

In this way, both coverages allow for a win-win situation. On one end, you get to avoid liabilities and out of pocket expenses. The other party who sustains damages or injuries also gets compensation.

Let’s have a closer look at these essential (and state-required) auto insurance coverages.

Property Damage Liability

In MA, the “Damage to Someone Else’s Property” coverage is the same as property damage liability. It covers damages that you may cause to other people’s property. This can be another person’s car, house, or other personal property.

Please note that this coverage only pays for damages to other people’s property and not yours.

Suppose that you get into an accident, and you end up denting someone’s else car. The property damage liability portion of your insurance will help pay to fix that damage. The same goes if you accidentally crash into another person’s fence or mailbox.

If you only carry the minimum required property damage liability coverage, then it will only pay for up to $5,000. Anything else would have to come from your own pocket.

Bodily Injury Liability

This protects you from liability in case you accidentally injure another person. It helps pay for the medical expenses that may arise due to their injuries. Moreover, it provides coverage in case the accident leads to the death of others.

Please note that this doesn’t apply to the passengers of your car.

What Then Is Bodily Injury Caused by Uninsured Auto?

The most recent III report shows that MA has the third-lowest uninsured motorist rate in the US. In 2015, the Bay State only had an estimated 6.2% of uninsured motorists. This is much lower than the national average of 13%.

Despite that low rate, though, it’s still one risk that you shouldn’t overlook. Besides, MA legally requires uninsured/underinsured motorist bodily injury coverage. With this, you can stay protected from injury losses caused by an uninsured motorist.

In addition, this coverage protects anyone else you allow to drive your car. It also applies to your household members, as well as your passengers.

This legally-required insurance coverage also provides protection against injuries caused by “unidentified” drivers. These are the “hit-and-run” motorists who cause accidents only to flee the scene. They’re common, with a study revealing that one hit-and-run crash happens every 43 seconds in the US.

What About Personal Injury Protection?

This is the part of your auto insurance that pays for your own medical expenses in case you get injured in a crash.

As mentioned above, the required minimum PIP limit in MA is $8,000. This means that your insurance will pay up to $8,000 for medical costs and replacement services. If you’re unable to work due to the accident, PIP will also pay 75% of your lost wages.

Aside from you, PIP also covers anyone else you allow to drive your car, as well as people who live in your home. It even covers passengers and pedestrians, no matter who caused the accident.

What Is Recommended for Car Insurance Coverage?

Accidents can lead to costs that exceed the coverage of state-required limits. The more severe the accident, the more considerable the losses and damages. It’s because of this that most drivers buy coverage limits higher than what the law requires.

On that note, many insurance agents and insurers recommend getting at least:

  • 100,000 bodily injury liability coverage, per person
  • 300,000 bodily injury liability coverage, per accident
  • 100,000 property damage liability coverage, per accident

The above is only a general recommendation, though, and it’s possible that you may need more than those. After all, the risk is different for each driver.

Other Common Types of Car Insurance

You might have noticed that there’s no state-required coverage that protects your car. However, there are coverages that fulfill this role, including collision and comprehensive coverages. These are the optional insurance coverages that can provide you with better protection.

With that said, here’s a quick look at optional car insurance coverages you might want to consider.

Collision Coverage

Collision coverage helps pay to fix or replace your car if it sustains accidental damage. The accident can be with another vehicle or object, such as a tree, fence, or post. Do note that it doesn’t provide coverage for personal property inside your car, though.

Collision car insurance coverage isn’t compulsory in Massachusetts. If you’ve taken out a car loan, however, your lender likely required you to get this coverage. Once you’ve entirely paid off your auto loan, this coverage then becomes optional.

Comprehensive Coverage

Vehicle fires may not be as common as house fires, but an estimated 212,500 of these still took place in the US in 2018. Together, they resulted in $1.9 billion in direct property damages.

If you have comprehensive coverage, it will help pay to fix or replace your vehicle in such cases. More than that, it will provide coverage if your car gets stolen or damaged in an accident that’s not a collision.

Aside from theft and fires, comprehensive coverage also typically covers damage from vandalism. It also usually covers falling objects, such as if a tree falls on your car. It may also help pay to fix or replace your car if you accidentally strike an animal.

Medical Payments Coverage

Another optional yet helpful car insurance coverage is medical payments coverage. This helps pay for medical expenses that are beyond your PIP coverage. It covers you, any other authorized driver, household members, as well as passengers.

Medical payments coverage kicks in no matter who caused the accident. Whether you or the other driver is at fault, you can expect this coverage to help pay for your medical expenses.

Optional Bodily Injury Coverage

In Massachusetts, you can purchase bodily injury coverage that’s beyond the mandated limits. What’s more, this optional coverage kicks in even if you get into an accident outside the state. It also provides coverage for bodily injuries that your passengers may sustain.

Car Insurance Coverage Calculator

Your auto insurance needs are as unique as you, your driving habits, claim history, and other risks. As such, it’s vital to calculate your car insurance needs based on these details. You can use this car insurance shopping checklist as a guide.

The easiest way to calculate how much coverage you need is with the help of an insurance agent, though. For starters, these experts have access to more accurate car insurance coverage calculators.

Independent insurance agents will also help ensure that you have adequate coverage. That’s because they will assess your unique needs, risks, and lifestyle factors. From there, they can give you personalized advice on how much car insurance coverage you need.

What’s more, insurance agents can help unlock the best insurance deals for you. They can assist you in finding insurance discounts and credits. Plus, they can help you not just buy the right car insurance, but also other insurance policies.

Go With a Pro’s Recommendation for Your Car Insurance Coverage Needs

There you have it, the answers to the question, what is recommended for car insurance coverage? Now that you know, it’s time to get to work and calculate your own coverage needs. This way, you can make sure that you have adequate coverage without breaking the bank.

Would you like to get a personalized auto insurance policy that fits your specific needs? If so, then please know that our team here at LoPriore Insurance Agency will be more than happy to help.

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