How to Choose the Right Coverage
How do you know what coverage is best for you and your family? This article should help. It talks about how to choose the right auto insurance coverage for you.
Here is a listing of the 12 different parts of the Massachusetts Personal Auto Policy. You can look at this as a menu – other than the State Required Minimums of parts 1-4 you can pick and choose which other coverages you want and what amount of coverages you want. These parts also carry over to your Motorcycle insurance policy.
Think of your situation and your budget as you go through the list. You can also check out here for the most common types of insurance coverage.
Massachusetts Auto Insurance Policy Required Coverages
For terminology, 20/40 refers to $20,000 per person and $40,000 per accident.
Part 1 – Bodily Injury to Others – Required – Covers injury to others in the State of Massachusetts 20/40 – you cannot change this amount.
Part 2 – Personal Injury Protection – Required – Covers up to $8000 of Personal Injury Protection for medical payments. Be sure there is no deductible associated with this part as this is where the big box online companies can get you – they will give a deductible – you do not want this. The savings are not worth it.
Part 3 – Bodily Injury Caused by an Uninsured Auto – Required – this covers injury caused by someone with no insurance 20/40. It is recommended you raise this to say 50/100 or more as it does not add much to the yearly price. Ask us for a quote.
Part 4 – Damage to Someone Elses Property – Required – Covers up to $5000 towards someone else’s vehicle – this part does not cover your car. If you rear end a car – this part covers the vehicle up to the state minimum of $5000. Just like if someone rear ends your car – their Part 4 would cover your car. Once you increase it from $5000 the price goes up a couple hundred dollars for the year. If you change it – go to $100,000 – this is the most common amount other than the State minimum.
These four parts represent the Massachusetts minimum liability requirements. Thousands and thousands of drivers choose this coverage but you have many other options available to you.
Part 5 – Optional Bodily Injury to Others – Optional – This is an important part as it covers passengers in your car as well as bodily injury to others outside of Massachusetts. It is not expensive (maybe $100 for the year) for what it covers. 20/40 is standard but higher limits are recommended – 50/100 or even 100/300 – ask us for a quote. Everyone at one time or another has passengers in their car – this is an important part to have. It is fairly inexpensive.
Part 6 – Medical Payments – Optional – this part pays reasonable medical expenses and funeral expenses as the result of an accident. This part is very inexpensive for what it offers. Ask us for a quote.
Part 7 – Collision – If you have a loan on your vehicle this part is mandatory otherwise it is optional. This is the most expensive part of the policy – especially for new drivers. This part has a deductible – this represents the amount you are responsible for if you have a claim. Deductibles available are $300, $500 and $1000. The lower the deductible you choose the more expensive the coverage will be. The most common deductible for this part is $500.
Part 8 – Limited Collision – Optional – this part pays only if you are not at fault and does not pay for hit and run. Most choose to bypass this part.
Part 9 – Comprehensive – If you have a loan on your vehicle this part is mandatory otherwise it is an optional coverage. This part covers for stolen, vandalism, fire and glass. It also has a deductible associated with it. You can choose $300 or $500. The most common is $300 and also be sure there is no deductible on glass. This is a good part to have if you live in a higher crime area or a very populated area. This part is fairly inexpensive and usually ranges between about $100 – $300 for the year.
Part 10 – Substitute Transportation – Optional – this part helps pay for a rental car if you have a covered claim on your policy. It is also fairly inexpensive at between $20 and $100 for the year. For coverages you can get $15 a day for 30 days, $30 a day for 30 days or even $45 a day for up to 30 days.
Part 11 – Towing and Labor – Optional – this is reimbursement only meaning if you need a tow you have to call the tow company, pay for the tow and then submit the bill to the insurance company. They would reimburse you up to $50 or $100 depending on which coverage you choose. A better deal is AAA – they will tow you up to 100 miles for free once you purchase their $95 yearly membership.
Part 12 – Bodily Injury Caused by an Underinsured Auto – Optional – but it is automatically included on every policy at no charge. This part covers injuries that are in excess of coverages available when the at fault vehicle is underinsured. This is very good coverage to have – 20/40 is standard – we always recommend higher limits of 50/100 – 100/300.
Which Coverage Should You Get?
All of the parts to the policy have their place. Some are required but most are not. You can mix and match the coverage to fit your needs or you can just get a full coverage policy. This brief description should help you decide how to choose the right auto insurance coverage for you.
Most importantly you will need to get your car insurance from an experienced agent who can give you the proper advice. Should you get basic liability coverage or full coverage insurance? It is all up to you.
To understand about car insurance more then you should visit our car insurance terms page. Here you can acquaint your self with insurance terminology which will help you as you shop for your car insurance.How much auto insurance you should buy is strictly up to you. This is why it is smart to get with an experienced auto insurance agent so they can present all your options to you.
No matter which coverage you choose to get you can always change your car insurance coverage when ever you want. Typically this would need to be done in person at your agents office, because as they say in insurance “if it’s not in writing it never happened”! If you add coverage to your policy it would be effective the next day. If you remove coverage it is always effective the same day.
At Western Mass Auto Insurance we stand ready to assess your current situation and advise you on the best insurance for your needs. Please contact us at (413) 543-3800 for Indian Orchard or at (413) 781-3800 for Forest Park.
Your Car Insurance Premium
Your determined car insurance premium is simply the dollar amount you pay for your coverage. Depending on your insurance company, you may pay monthly or you can pay for the full year – this would give you up to a 10% discount. Car insurance premiums can vary based on things like the deductible you choose, how long you have been driving, the year, make and model of your car, your driving history, and the type of insurance you purchase.
Your price will also be determined by who you list as a driver on your policy. In Massachusetts the law states that every household member who has an active drivers license should be listed on your policy. You can follow these guidelines to determine who should be listed as a driver on your auto insurance.
To keep your insurance premiums as low as possible be sure to bundle your car insurance with either your home policy or get a renters policy. This is a very popular option.
Once your renewal for car insurance comes around it is possible your price may increase or decrease. There are many reasons for these changes so be sure to review our article about why your car insurance price may go up.
Your Coverage Limits
Your coverage limit is the maximum amount your policy will pay for each type of coverage you choose. Work with your experienced agent to make sure you have the maximum amount of coverage you can afford. If you have a claim and you exceed your policy’s limits, you can be held responsible for any remaining costs.
No-Fault and At-Fault
Currently there are 12 states with no-fault insurance laws – Massachusetts is one of these states. In these states, your auto insurance automatically pays toward your claim for medical payments for you or your family, up to your chosen limit, regardless of whether you’re at fault or not.
Types of Auto Insurance Coverage to Choose
So how much car insurance do you really need to protect you, your passengers, and your car? Three of the most important types of auto insurance you can have are liability, comprehensive and collision coverage. Full coverage insurance consists of all three. Check out here to learn how to find the best car insurance in Massachusetts.
Though liability coverage doesn’t protect your car, it does protect your wallet! If you’re in an accident where it is determined you are at fault – your liability insurance will cover third-party costs you would typically be responsible for such as medical or auto-repair costs that others might sustain due to the accident.
Your liability coverages on the Massachusetts auto policy are parts 1-4 and part 5 and 12. Parts 1, 3, 5 and 12 cover Bodily Injury.
So how much liability insurance should you have? The easy answer is as much as you can afford to have. $20,000 per person and $40,000 per accident are the Massachusetts state minimums but we recommend you get higher limits of between $50,000 per person and $100,000 per accident to $100,000 per person and $300,000 per accident.
Comprehensive Coverage Part 9
This coverage covers any damage to your vehicle other than a collision with another vehicle or object. Whether it’s stolen vehicle, damage from a fire, vandalism, hitting an animal or even a limb falling on your car, comprehensive coverage – Part 9 – will pay to replace or repair your car as long as the damage isn’t due to a collision.
Like liability insurance, comprehensive coverage is fairly inexpensive so you’ll want to have it whether you’re driving a beater or a brand-new car. This part also has a deductible associated with it, the most common and lowest is $300. There is typically no deductible for glass breakage.
No one wants their vehicle stolen so follow these tips on how to protect against vehicle theft.
Collision Coverage Part 7
As we all know accidents happen this is why, to protect your vehicle, Part 7 or collision is the way to go. This is the most expensive part of the policy. No matter who is at fault, collision coverage pays to repair or replace your car if you’re in an accident with another vehicle, object or if you get hit and run.
People who have a loan on their vehicle are required by the lienholder to carry collision coverage. Otherwise if you do not have a loan on your vehicle it is up to you as to whether you get this part.
As a rule of thumb if your vehicle is worth less than $3000 most people do not get collision. Likewise if your vehicle is over 10 years old most people do not get the collision coverage. It is all economics. You need to figure the value of your vehicle, the cost of your collision coverage and then factor in your deductible to determine if it is worth getting collision. Consult with your experienced agent for the best advice and different pricing options.
Plus some people just feel more comfortable with collision coverage. Otherwise they get nervous when they are driving, which, itself, can lead to an accident. So the bottom line it is all up to you.
Medical Expenses Coverage Part 6Whether you’re covered by health insurance or not, Medical Expenses Coverage Part 6 covers reasonable medical expenses for you, your passengers or any family members associated with an auto accident—no matter who’s at fault. This part is inexpensive so it is always good to get pricing to see if it is affordable for you.
Personal Injury Protection (PIP) Part 2
This important part is Part 2 on the Massachusetts auto policy. It is inexpensive and should never have a deductible. be sure to ask your agent or company whether your PIP coverage has a deductible.
Here are some things PIP may cover for you:
- Medical expenses
- Funeral costs
- Physical or occupational therapy
- Approximately 60–80% of lost wages
In Massachusetts PIP coverage will offer immediate non-taxable coverage up to the limits set by your auto insurance ($8000) and would need to be exhausted before you have to tap you’re your Part 6 Medical Payments or your own health insurance policy.
Guaranteed Auto Protection (GAP)
If your car is less than 5 years old this is great coverage to have. At Western Mass Auto Insurance we offer very inexpensive GAP insurance so be sure to contact us for pricing.
With the cost of new cars going up the average length of a car loan has expanded to six years or more, making GAP insurance more popular than ever especially if you do not put any money down on your purchase. This automatically puts you “upside down” on your loan, meaning you owe more than the car is worth.
If you got into an accident as you pulled out of the dealership’s lot, collision and comprehensive insurance would only cover the actual cash value of your vehicle. That means you’d be responsible for up to 25% of the car’s value that you lost the second you drove it off the car lot! GAP insurance would cover the “gap” – the difference between your car’s value and what you owe to the bank.
Uninsured (UM) and Underinsured (UIM) Motorist
Uninsured motorist coverage (Part 3) covers medical expenses (for you and your passengers) that result from a hit-and-run driver or a driver who’s uninsured, but it does not cover damage to your vehicle.
Underinsured Motorist Insurance (Part 12) covers you when you’re in an accident caused by a driver whose insurance coverage is not enough to cover your bodily injuries and you have higher limits. You are able to collect the difference in what the driver has and your higher limits.
Rental Reimbursement Part 10
Rental Reimbursement coverage (Part 10) was designed to cover the cost of a rental car (up to a specific dollar amount and number of days) while your car is being repaired for any damages covered by your insurance.
Roadside Assistance Part 11
Roadside Assistance coverage or Towing and Labor (Part 11) covers having fuel brought to you, getting your battery jumped, having your car towed to the nearest repair shop, or fixing a dead battery. It is nice to have but AAA is better.
Remember the Massachusetts auto policy covers this on a “reimbursement” basis only – if you don’t have the money with you to cover the tow you would have a problem. This is why getting AAA is much better as they will tow you up to 100 miles for free whenever you need them. Contact AAA to get this ($95 for the year).
Cancelling Your Car Insurance
In Massachusetts there are several ways to cancel your car insurance:
- If you have sold your vehicle and wish to cancel your car insurance then you must cancel your license plates and inform your agent – they will cancel your policy.
- If you wish to change agencies perhaps for a better price or better customer service then the new agent would send a 2A letter to the previous agent to cancel your policy.
- The last unfortunate way that car insurance gets cancelled is if it cancels for non payment. This can be a problem as it will make your next policy a bit more expensive. If you are having financial difficulties paying for your car insurance contact your agent for assistance and advice.
This would be an additional endorsement to your auto insurance policy. If you’ve permanently installed aftermarket or performance parts on your car, you could carry Custom Equipment coverage. You would need to get your vehicle appraised to determine how much you actually want your car insured for.
Accident Forgiveness Coverage
This is a great addition to anybody’s coverage. Most companies now offer this benefit. Essentially if you have signed up for this benefit – even though you have an at fault accident the insurance company will not charge you for this on your rates. It still goes on your driving record but the insurance company will not charge you. If you leave the company and go elsewhere – other companies will simply look at your driving rate and charge you based on your points. This is a great benefit to add and usually is very inexpensive.
Should I Choose a High or a Low Deductible—Which One Is Right for Me?
If you choose a high deductible, your insurance company looks at you as a lower risk and will reward you with a lower premium. If you choose a low deductible, your premium will be higher because you represent a greater risk to the insurance company.
We recommend a $1,000 deductible because that usually means you’ll pay a lower premium. Whichever you choose it is important to know how car insurance deductibles work this way there won’t be any surprises if you need to file a claim.
This is another great benefit to have. It is automatically given to you by your insurance company. Your collision deductible decreases every year you’re accident free. What’s important to remember is that the deductible reappears in full the second you get into an accident.
As we all know accidents happen, so to protect yourself and to not get any surprises in case you do have an accident it is very important for you to always review your insurance coverage and understand what they are before you ever need them. This is just being smart.
You don’t want to have a claim and then come to find out you don’t have the coverage you thought you did. Or you don’t have rental coverage to get a rental car in case your car is in an accident. Be sure when you leave your insurance agent that you fully understand what you have for coverage and just as important what you are not covered for. You can check out this additional information about Massachusetts car insurance claims and what to do if you have a claim.
Also when you have a claim this is typically when the insurance company will go over the details of your policy with a fine tooth comb. They will at all aspects of your policy and determine if there has been any insurance fraud. This is the leading reason why insurance premiums are as high as they are and insurance companies do all they can to prevent fraud.
One of the worst events that can happen to a driver is getting caught for a DWI – driving under the influence. This can cost upwards of $10,000 and greatly increased insurance costs. In this instance you may be required to get an SR22. We can help you obtain this and explain how it works.
Your experienced insurance agent should make sure you understand your policy. Please ask questions when you sign up for the policy.
Car Insurance and Your Rental Car
In Massachusetts your car insurance will follow you if you get a rental car. There are a few things you need to know about car insurance and your rental car, so be sure to contact your experienced insurance agent to discuss this matter.
Things Your Insurance Agent Should Know
Many factors affect the type of insurance you need and the premium you’ll pay. Here is a list information your insurance agent needs to know to not only pick the right policy for you, but to also save you some money. Tell them:
- If you’re married—it could help lower your premium
- If you use your car for both business and personal use, even if it’s a small side business.
- If you plan to travel out of state frequently.
- If you have a teen driver who makes good grades or has completed Driver’s Education.
- Who exactly you want included on your policy.
- If you own a home you qualify you for an additional discount.
- If you have any anti-theft devices installed in your car.
- If you’d prefer to get paperless statements you would get an additional discount.
- If you want any household members excluded or added to your policy.
If you get your insurance with Western Mass Auto Insurance any questions we ask you are for the sole purpose of getting you the best price we can.