Unlike most states, which allow drivers to prove financial responsibility in a variety of different ways, such as purchasing an indemnity bond or self insuring, Massachusetts only allows residents to satisfy financial responsibility requirements in one way and that is purchasing minimum levels of liability coverage. In the state of Massachusetts vehicle owners are required to maintain minimum amounts of liability coverage on every vehicle they own. If a vehicle is not covered by minimum levels of liability insurance required by the state it cannot be legally driven on a public road. In Massachusetts minimum coverage levels set by the state currently sit at $20,000 in per person bodily injury coverage, $40,000 in per accident bodily injury coverage and $5,000 property damage coverage. Massachusetts law also requires that vehicle owners purchase at least $8,000 in personal injury protection. This personal injury protection is meant to cover medical expenses and lost wages resulting from an auto accident, regardless of who is at fault. When a car insurance policy is purchased in Massachusetts it automatically include levels of coverage that meet the state’s minimum requirements though policy owners can purchase extra coverage if they so desire. Massachusetts car insurance companies also offer a variety of optional forms of coverage for residents of the state, including collision, comprehensive and medical payment coverage. Unlike liability coverage, most of the optional coverage offered by car insurance companies to Massachusetts residents is payable directly to the policy holder and does not require fault to be placed on a driver before the money is paid out. Even if a policy holder with one or more of the above mentioned forms of optional coverage is at fault in an accident they are still eligible to receive the money paid out from the insurance company.
In Massachusetts, if a vehicle owner allows their insurance coverage to lapse or cannot provide proof of insurance when requested they risk being penalized for failure to maintain coverage as dictated by state law. In addition to the cost of the violation itself, receiving a citation for lack of insurance can also cause insurance premiums to rise. The mandatory fine for driving without car insurance in Massachusetts is a minimum of $500 and a maximum of $5,000. The amount of the fine a driver receives for driving without insurance will largely depend on whether or not they have been caught driving without insurance before. In some cases a driver without insurance can also be penalized by up to a year in jail if they cannot pay the fine. Drivers caught without car insurance also risk having their license suspended for up to 60 days by the Registry of Motor Vehicles. Additionally, the tags and registration of a vehicle could also be suspended, which will result in the driver having to pay more fines to have their driving privileges reinstated. In most cases the fees and fines a driver will incur for driving without car insurance will more than exceed any potential savings they saw from not paying insurance premiums.
Recently, the state of Massachusetts has done away with its old fixed car insurance system that managed competition between insurance companies and required companies to apply certain surcharges to their customer’s insurance premiums for different types of traffic violations. Now, car insurance companies licensed to sell insurance can decide what surcharges they charge their customers for traffic violations, known in Massachusetts as a merit rating plan. This allows car insurance companies to set their own surcharges as well as credits in the form of a safe driver insurance plan. This plan rewards drivers to having a clean driving record and not having any accident and penalizes drivers that have a checkered driving history. Although insurance companies are free to determine their own rates based on a drivers history Massachusetts law prevents insurance companies from using anything older than six years when calculating the premiums for a customer. The way insurance companies calculate premium rates in Massachusetts also makes it extremely beneficial for residents to shop around for a policy. Since insurance companies in Massachusetts are allowed to calculate premiums based on the factors they determine to be important, such as a driver’s age or driving history, a motorist in Massachusetts can easily get five different quotes from five different car insurance companies. Even if two car insurance companies use the same criteria to determine insurance rates they are still likely to weigh the criteria differently, resulting in different rates for the same driver. Unfortunately for residents of Massachusetts, legal restrictions make it rather difficult for a vehicle owner to easily receive car insurance quotes from multiple auto insurance companies, primarily because there are a variety of restrictions on providing insurance quotes on the internet. Because of this, if a driver in Massachusetts wants an official quote they will more than likely have to call the company or visit a local agent in person.