MA Auto Personal Injury Coverage: Add 2 Options to Increase Protection

Posted by Joseph F. Agnelli, III on 09/13/2022

UNDERSTANDING MASSACHUSETTS AUTOMOBILE INSURANCE LAWS AND THE VALUE OF HAVING ADEQUATE PERSONAL INJURY COVERAGE

Automobile insurance. Every vehicle on the road must have it, but do those insured drivers truly understand what is in the Massachusetts Standard Automobile Insurance Policy? The answer is probably no.  Perhaps you, as a driver, know that if you get into an accident your insurance will pay for the repairs to your vehicle (minus your deductible), and that your insurance may pay for towing or a rental car if your vehicle is undrivable after the accident.

But what does your insurance cover if you, or someone else, is hurt in the accident? What happens if the other driver caused the accident and they do not have insurance? What if you are hurt badly and the other driver only mas minimal insurance coverage?

According to data compiled by the Insurance Information Institute, the average cost of bodily injuries was $20,235 in the year 2020. The IRC reported that in 2019, 1 in 8 drivers was uninsured. In Massachusetts, 3.5% of drivers were uninsured, while Rhode Island had a whopping 16.5% of uninsured drivers on the road in 2019.

This article will seek to provide an explanation of the various types of coverage that is required (called compulsory coverage), or what are the types of available coverage that you can add to your policy (called optional coverage), with an emphasis on the types of coverage for personal or bodily injury. There are other types of coverage that pertain to property damage, but given the nature of Agnelli Law Offices law practice, i.e., personal injury, this article will focus on the personal or bodily injury type of coverages.

This article will then conclude with an explanation concerning the value of adding certain coverages, or adding more personal injury coverage, and the potential pitfalls of “skimping” on certain coverages to save some money on your insurance bill.

The Massachusetts Standardized Automobile Policy – A Relic of the Past

Massachusetts used to have a standardized automobile policy for passenger vehicles which was published by the Mass. Division of Insurance (DOI). The rule in MA used to require all insurers to adopt and use this standard policy.  However, that is no longer the law.  Now, the MA DOI publishes the standardized automobile policy only as a so-called advisory filing, which insurance companies “may” choose to adopt, either in whole or in part. 

On the other hand, insurers are also free to change or modify a policy to be specific to its coverage offered, or any rules that it requires policyholders to follow.  So, the standard automobile policy issued by the MA DOI shall only act as a general guide and you are cautioned that your own personal automobile policy may differ significantly on the types of coverage or have specific rules and requirements to follow. 

Thus, this article is intended only to provide you with general information on the various types of coverage available and is not intended to be legal advice. Agnelli Law Offices encourages the reader to consult with an independent insurance professional before making any decisions which may affect their insurance policy and personal injury coverage.

Mandatory Coverage – No Choice on These!

Under Massachusetts law, ALL automobile insurance policies must have the following coverage. These are not optional, and are referred to as “compulsory coverage.”

1. Personal Injury Protection (PIP) – PIP is essentially the first line of medical coverage for the driver of a vehicle involved in an accident, any passengers in the vehicle, AND any pedestrians who were struck and injured by the vehicle. The mandatory PIP insurance coverage is $8,000.00 and is considered a “no-fault” benefit. This means that if you are injured in an accident, no matter who caused it or who is more at fault, the drivers, occupants, and pedestrians involved in the accident are entitled to have their own automobile insurance company pay for their initial medical treatment following the accident.  Typically, depending on the severity of the injuries, this would be an ambulance ride and emergency room visit, for example.  When you are taken to the hospital, the admissions people will almost always ask you for the name and policy number of your auto insurance company, as well as your health insurance company.  This is because they are going to send the bill to your auto insurer first. 

How much of the $8,000 your auto insurer will pay under PIP depends on the type of health insurance you have. An entire separate article can be written about coordination of benefits between PIP and health insurance, but to put it simply, if you have private health insurance (Blue Cross, Tufts, etc.), your auto insurer will pay the first $2,000 of PIP and then the rest must go to health insurance. However, even if PIP only pays the first $2,000, the remaining $6,000 can be used to seek reimbursement for co-pays and deductibles. On the other hand, if you are on state Medicaid (MassHealth) or Medicare, your insurer is required to use up all the $8,000 in PIP money before MassHealth of Medicare will pay for any accident-related treatment.

• Bodily Injury to Others (BI) – This is insurance coverage if YOU cause an accident and hurt someone in the process, either another driver or passenger in another vehicle, a passenger in your vehicle, or a pedestrian.  This coverage will compensate an injured person for their injuries, medical bills, and loss of income. The minimum amount of BI coverage that you must have in Massachusetts is $20,000 per person and $40,000 per accident. This means that your insurance company is obligated to pay up to those amounts to an injured person(s) if you cause the accident. 

Also, your insurance company will likely pay that money out without you ever knowing it. There is a hidden part of nearly all insurance policies that says you give the insurance company permission to settle all claims for BI without your consent.

• Bodily Injury Caused by an Uninsured Automobile (UM) – This is insurance coverage that protects YOU, other household members, or passengers (in some circumstances), from injury if you are involved in an accident that was not your fault AND the other driver did not have any insurance, or if you are involved in a hit and run accident where the other driver could not be identified. The law also requires that you must have in Massachusetts is $20,000 per person and $40,000 per accident of this type of insurance.

That’s it. That is all you are required to have for personal or bodily injury insurance[1] if you want to drive a car in Massachusetts. Sounds simple, right?  The answer is no. It’s not that simple. Quite often the minimum insurance listed above is not enough insurance to adequately protect you, or your loved ones, in the event of an accident.  Everyone is different and everyone has different needs and situations.  Thus, it is important to understand what other types of insurance coverage may be available to you and, more importantly, understand the value of having adequate insurance coverage for you and your family. Below is a summary of the “optional coverage” that may be available to you, and at the end is a discussion of how those optional coverages can be of value to you and your family.

Optional Coverage for Bodily Injury – Not Required, but Smart to Have

1. Optional Bodily Injury to Others – This is an increased limit of coverage that pays others who are hurt in an accident that you cause. Most insurance companies will offer limits as high as $250,000 per person and $500,000 per accident. But why would you need this much insurance?  Who cares how much money someone else should get for their injuries? They can’t go after me; I am insured no matter how much coverage I have! These are questions and comments that I often hear from clients and are topics that this article seeks to address. 

Why someone needs this much coverage to pay for another person’s injuries depends on their own unique situation. I completely understand one’s belief that it shouldn’t matter how much insurance they have since it is only payable to other people.  Why should they care? Well, to be honest, they should care, and some should care a lot! 

They should care because buying insurance is “hedging” against the worst-case scenario. When someone buys insurance, they are “hedging” that they will never need to use it, but they know that they have the insurance JUST IN CASE something happens. This is true for all kinds of insurance, not just automobile insurance.

You live near the ocean, and you buy flood insurance; why? Because you need the insurance just in case there is a flood, but you hope to never need to use it.

You have a family, and you buy life insurance; why? Because you need to ensure that your family is taken care of if you pass away, but you hope to never need it.

These are both examples of “hedging” with insurance. Guess what? Your insurance company is “hedging” too when they sell you insurance.  The insurer is hedging that you will never need to use it and they can make a profit on you when you pay your premiums. 

However, an insurance policy is a binding contract between you, the policy holder or insured, and the insurance company, the insurer. You, the insured, pay a premium to the insurance company in exchange for the insurance companies promise to cover you in case a triggering event occurs. In the world of automobile insurance, the triggering event is most often an accident.

But this doesn’t answer the question why someone would need a half-million dollars’ worth of coverage for another person’s injuries!  Yes, it does. You may need this much coverage to “hedge” against catastrophe. For example, you cause a major accident which paralyzes another person for life. Or, worse, someone is killed in the accident. The damages those people suffer could be massive and simply having $20,000/$40,000 would not even come close to covering it.

But, if that catastrophe were to happen and you had $250,000/$500,000 of coverage, you would be covered by your insurance company up to $500,000 in that accident.

That is piece of mind. You are “hedging” hoping to never have to use it but knowing it is there IF you need it is piece of mind.

This is particularly important if you have a lot of personal assets (homes, cars, boats, etc.), or if you have an umbrella insurance policy.[2]

For those of you with a lot of assets, it is important to have full coverage. It is important because if you have minimal coverage, like the mandatory $20,000/$40,000, and someone is catastrophically injured, they may sue you personally and your assets can be attached by a court order and, later, could be repossessed and sold. Having full coverage lowers the risk of that happening.

Now, on the flip side, you may not have any assets, or an umbrella policy, and you don’t see a risk to you personally. However, with the cost of insurance in MA being very competitive,[3] it generally will not cost you a lot in premiums to add some more optional BI coverage to your insurance policy. Perhaps you don’t need $250,000/$500,000, but you can increase it for relatively low premiums.

• Optional Coverage for Accident Caused by an Underinsured Motorist (UIM) – This is, hands down, probably the most important, least expensive, yet most often overlooked type of optional insurance coverage out there. But what is this insurance and why should you have a lot of it?

UIM insurance covers injuries and damages to you, a household member, or other passenger (not already covered by their own policy), if injured in a crash, AND the at-fault driver has inadequate BI insurance of their own.

Using the example from earlier, if you suffer a catastrophic injury and the other driver has minimal insurance, like the mandatory $20,000/$40,000, your UIM insurance will pay you for your additional damages beyond what the other insurance company pays you.

In my personal injury practice, I too often see a client with minimal, or no, optional underinsured motorist coverage on their insurance policy, yet they have had extensive injuries from the accident and the driver at fault has minimum insurance. In these situations, no matter how injured the client is, the only available insurance money to them is $20,000. This is devastating news to my client when they hear that.  However, if the client had additional UIM coverage of their own, above and beyond the $20,000 we could have pursued a claim against that policy to get the additional money from UIM.

The importance of UIM Insurance cannot be understated!

Despite its importance, it is also very inexpensive. Most insurers will offer up to $100,000, and others up to a full $250,000, of UIM coverage at a very low premium. Quite often the premium for UIM is so low that it is barely noticeable over the course of a years’ time. In some cases, for a highly rated driver, I have seen full UIM coverage for less than $30.00 for the entire year!!! Sometimes it can be even less and considering how inexpensive it is, there is no good reason for having less than the most coverage being offered.

This article only briefly touches on the various coverages that may be available to you. Everyone should contact a qualified insurance professional to inquire which of these coverages may be available and at what cost.

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[1] You must also have $5,000 of property damage coverage as well, but that is omitted from the main article due to it being unrelated to this article’s focus on bodily injury coverages.

[2] Most insurers who provide umbrella (or excess) insurance, require you to have $250,000/$500,000 of BI coverage to others. 

[3] For people with good insurance ratings and a history of good driving.

References

Corum, CPCU , D. (2021, March 22). One in Eight Drivers Uninsured, News Release. Insurance Research Council (IRC). Retrieved September 12, 2022, from https://www.insurance-research.org/sites/default/files/downloads/UM%20NR%20032221.pdf

Facts + statistics: Auto Insurance. III. (n.d.). Retrieved September 12, 2022, from https://www.iii.org/fact-statistic/facts-statistics-auto-insurance#Auto%20insurance%20expenditures,%20by%20state

Understanding Auto Insurance. Mass.gov. (n.d.). Retrieved September 12, 2022, from https://www.mass.gov/service-details/understanding-auto-insurance