Auto Insurance, Are You Really Covered?
In Massachusetts, auto insurance is highly regulated.
This means that the types of coverage, or coverage “parts” provided by the “Standard Motor Vehicle Insurance Policy” are the same for everyone in non-commercial automobile policies.
Everyone who purchases automobile insurance coverage is required to have a minimum amount of coverage in case they injure one or more persons. The minimum coverage is referred to as “compulsory coverage,” that is, the coverage that all drivers must maintain to legally operate a motor vehicle on public roadways. What differs from person to person, is whether the insured driver elects to purchase “optional bodily injury coverage” (Part 5), and how much optional bodily injury coverage they choose to purchase.
In all, there are 12 parts to each auto policy: four are compulsory and eight are optional.
Many drivers believe that if they have all four (4) compulsory parts of the “Standard Motor Vehicle Insurance Policy,” they are “fully insured.” Nothing could be further from the truth.
In this series, we will review each of the twelve parts of a Massachusetts automobile policy and provide – based on decades of experience in personal injury law and motor vehicle related cases – our thoughts on the most important things to consider when purchasing auto insurance.
Let’s begin with Part One of the Massachusetts personal injury policy coverage list.
Part 1: Bodily Injury to Others
In Massachusetts, an individual driver is legally obligated to purchase no less than $20,000/$40,000 of automobile insurance coverage for injuries and/or losses they may cause because of the negligent operation of their motor vehicle (or someone using their vehicle with the permission of the owner). The reason the coverage has two amounts ($20,000/$40,000) is because Massachusetts requires all drivers to have at least $20,000 for each person injured and at least $40,000 in the event two or more persons suffer injuries and losses. This is known as a “split limit.” Several coverage categories of the standard Massachusetts auto policy are expressed as split limits.
As mentioned, many drivers who cause an accident often believe that by having the compulsory bodily injury coverage of $20,000/$40,000 they are “fully insured,” that is, until they learn (the hard way) that this is simply false. In fact, purchasing just $20,000/$40,000 of bodily injury coverage is actually the “minimum” amount of coverage you can purchase to legally operate your motor vehicle on a public roadway.
If you cause injuries or losses to another person or persons as a result of your negligence, the cost of medical treatment plus any resulting lost income by the injured party, can rise to tens or even hundreds of thousands of dollars or more. In the event you are found liable for the accident and the verdict is well beyond your policy limits you may be looked-to, personally, to make up the difference between the coverage limits you purchased and the amount the jury awarded to the injured person(s). Coming up with those additional funds may, if required, mean that you have to sell or remortgage your home, or perhaps even file personal bankruptcy.
To help reduce personal exposure we strongly recommend that you purchase the highest optional bodily injury coverage you can afford, which we will discuss in greater detail in Part 5 of this series.