Massachusetts Car Insurance: Are You Really Fully Insured?

Key Takeaways:

• Massachusetts auto policies have 12 parts; only Parts 1–4 are compulsory
• These compulsory parts provide minimal coverage in the event you are responsible for the medical costs and pain and suffering of someone injured in a car accident, including limited coverage for yourself and family members
• You may be held financially responsible for damages that exceed your policy limits
• Million dollar claims are increasingly common
• Insurance companies can take your personal assets, including your home, savings, investments and other assets, to cover their costs
• Best practice: buy as much optional coverage as you can reasonably afford

Every Massachusetts auto insurance policy comes with the same Description of Coverage sheet, or “DEC sheet”, outlining twelve parts of coverage. Only the first four are compulsory, and you cannot legally drive without them. But compulsory does not mean complete, or “full coverage”, as many people mistakenly believe. On the contrary. This is the minimum coverage you can purchase to legally put a car on the road in Massachusetts. 

The reality is that serious accidents often cost far more than the minimum coverage allows. Medical treatment, lost income, long-term care, and pain and suffering can quickly reach hundreds of thousands of dollars, and million-dollar claims are no longer rare. If a verdict or settlement exceeds your policy limits, you could be held personally responsible for the balance. That might mean selling or refinancing your home, draining savings, or even facing bankruptcy.

Different parts of the policy protect different people: Parts 1, 3, 4, and 5 cover injuries to others, while Parts 2, 6, and 12 cover injuries to yourself, your family, or an authorized driver. For a full breakdown, see our Massachusetts Auto Insurance series. Here, we focus on why it’s critical to buy as much auto insurance as you can reasonably afford, and which optional coverages matter most.

Massachusetts Auto Insurance Policy DEC Sheet:  

* always consult with an agent or other insurance professional for help in determining what types and how much coverage you need

** purchasing this level of coverage makes you eligible for additional umbrella coverage

Why Compulsory Insurance Doesn’t Provide “Full Coverage”

The compulsory parts of your policy are just that – compulsory. You must purchase this minimum amount of insurance to legally operate your vehicle in Massachusetts. While this minimum offers a baseline of protection, the limits are low, and the reality is that “compulsory” rarely means “enough.” Here’s a closer look at what the required parts actually cover and why additional coverage is strongly recommended.

Part 1: Bodily Injury to Others

Massachusetts drivers are required to carry $25,000/$50,000 in coverage for medical expenses of others, but not your passengers, when they are at fault for an accident that occurred in Massachusetts. That means up to $25,000 is available for one individual and a maximum of $50,000 for two or more people, regardless of the severity of the injuries. In many cases, these limits fall far short of actual medical costs, which is why we strongly recommend maximizing this coverage, and also supplementing with additional coverage in Part 5.

Part 2: Personal Injury Protection

Personal Injury Protection, or PIP, covers medical, replacement services and 75% of any actual lost wages for occupants of your vehicle, you or household members injured in other vehicles, and pedestrians or bicyclists hit by your vehicle, up to a maximum amount of $8,000. After this amount is reached, any additional costs are covered by the injured party’s health insurance provider, which will be eager to recover these costs through a health insurance lien placed on any potential financial awards recovered in a personal injury lawsuit. This is why we recommend adding additional coverage in Part 5.

Part 3: Bodily Injury Caused by an Uninsured Auto

The reality is that some people operate vehicles that are not insured at all, and this part provides coverage if you or passengers in your vehicle are injured by another driver who has no insurance. The compulsory minimum provides $25,000 for one person and $50,000 for two or more, to cover medical bills, lost wages, and pain and suffering. Serious accidents, however, can easily result in costs that exceed these amounts several times over and without sufficient coverage, you will need to cover these costs yourself. We recommend increasing this coverage to the maximum offered by your insurer.  

Part 4: Damage to Someone Else’s Property

Part 4 covers damage or the total destruction of another person’s (or company’s) vehicle or property, up to $30,000. Considering the high cost of modern vehicles, especially luxury and high-end models, this amount can be exhausted quickly. Increasing the limit here, and supplementing under Part 7, is a prudent step to avoid being personally responsible for excess repair or replacement costs.

Additional Optional Auto Insurance Could Save You Millions

We have examined the compulsory parts of a Massachusetts auto insurance policy and why they often don’t provide the coverage you expect. When it comes to protecting yourself and your family, the optional parts of a Massachusetts auto insurance policy are worth a closer look. While the amount of coverage you choose in Parts 5–12 often depends on your personal situation, the value of your vehicles, and your comfort level, increasing coverage in Parts 5, 6, and 12 can make a life-changing difference. Many lawyers view Parts 5 and 12 as among the most important coverage you can buy.

Part 5: Optional Bodily Injury to Others

This section allows you to “top up” the compulsory coverage in Part 1 if you are responsible for injuring others. Think of it as indemnification protection for yourself. Medical and other costs can skyrocket when injuries are severe—especially if multiple people are involved. Without additional coverage, you could be personally liable for hundreds of thousands, even millions, of dollars. Insurance companies and their lawyers can pursue your home and other assets to recover damages.

If possible, we recommend that you purchase the maximum available: $250,000/$500,000. This still caps coverage at $250,000 for one person and $500,000 total per accident, but it also makes you eligible for umbrella coverage. Umbrella policies, ranging from $1 million to $10 million, may be available from your auto or home owner’s insurer to extend protection even further. Think of the assets you have and purchase enough umbrella insurance to better protect them.

Part 6: Medical Payments

“MedPay” builds on the PIP protection in Part 2 and provides you with additional coverage for out-of-pocket medical expenses related to injuries suffered by you, anyone occupying your vehicle, or other members of your household in the event of a motor vehicle accident and will help offset the deductibles and co-pays for which you would otherwise be responsible. At a minimum, we recommend at least $25,000 in MedPay coverage, though some insurers offer more. The cost difference for higher limits is often small, so check with your provider.

Part 12: Bodily Injury Caused by an Underinsured Auto

Part 12 is the coverage we feel most strongly about. It protects you and household members if you suffer serious injuries caused by another driver who does not have enough insurance to cover such losses.

Massachusetts has a significant number of drivers who purchase only the legal minimum, including students and others who can’t afford additional coverage. Too often, injured motorists discover that the maximum available (before attorney’s fees and medical costs) is just the $25,000 available in Part 3. Purchasing Part 12 ensures that your compensation is no less than the amount of coverage you purchase. Some insurers sell up to $1 million in underinsured coverage, so ask what maximums are available. Purchasing the highest amount of Part 12 coverage you can afford can be among the smartest insurance decisions you can make for your and your family’s future.

Call the Experienced Auto Accident Attorneys at Parker Scheer

If you or a loved one has been injured in a motor vehicle accident, call the experienced personal injury team at Parker Scheer. We regularly work with every major insurance provider in Massachusetts and know how to secure significant financial compensation for you and your family.

This article is for general informational purposes only and does not constitute legal advice.