- February 21, 2022
- Posted by: admin
- Categories: Auto Insurance, Car Insurance Questions, Driver Info, How to Buy a Car, Insurance Coverages, Massachusetts Laws, Points Drivers, Teen Drivers
6 Factors That Determine the Cost of Your Car Insurance in Massachusetts?
So, how much is car insurance? The cost of car insurance in Massachusetts depends on many factors including:
- How long you have been driving
- How is your driving record?
- What “territory” you live in
- The year, make and model of the vehicle you have
- What kind of insurance coverage you need or want
- The payment method you choose
Let’s look at each of these factors individually.
How Long You Have Been Driving
In Massachusetts, car insurance is based on how long you have been driving. It goes by 0-3 years, 3-6 years and 6 years plus. In addition you get another discount if you are over 65 years of age.
After you have been driving 3 years your price goes down. After you have been driving 6 years your price goes down.
The most expensive year is your very first year. It has been shown that 60% of “new drivers” have and incident in their very first year. This is why first year rates are the highest.
If you can make it through your first year with no incidents on your driving record and you successfully pay your car insurance without letting it cancel for non payment or lapse – you are assured a better price in your second year!
How is Your Driving Record?
Your driving record has a huge effect on the price you pay for car insurance in Massachusetts. As a new driver you start out with no points. Then as time goes by if you continue to have no incidents, after 5 years you are a “98” which means no incidents in 5 years and if you can go 6 years in a row with no incidents you are referred to as a “99” – this is the best you can be and you actually get a credit on your car insurance price.
To get points you need to have a moving violation of some type or an accident. Moving violations are speeding tickets, no inspection sticker, texting while driving, lane violations etc. You do not get points for your first moving violation, but for each thereafter you get 2 points each.
At fault accidents can give you either 3 points or 4 points, depending on how much is paid out by the insurance company. There are many ways to be “at fault” but typically at fault accidents are when you take a left hand turn and cause an accident and when you rear end another vehicle.
You need to go 5 years from the surcharge date of an incident for the points to drop off your record. You need to go three years with no incidents to lose 1 point off of each of your incidents. So the answer to how to get rid of points? Time has to go by, there is no other way to drop points – unless you appeal your points with the RMV and win your appeal.
Lastly, each point you have can account for a 10% to 15% increase on your car insurance rate. Not good. My best advice is no speeding, no texting and keep lots of room between you and the car in front of you.
What Territory You Live In
By “territory” insurance companies mean where you live. If you live in a heavily populated area then car insurance rates are higher. For instance, if you live in Springfield, mass there are over 180,000 cars. You would have a higher possibility of hitting another car than say if you lived in a much less populated area.
In contrast, if you live in a smaller town outside of Springfield, like Ludlow, Wilbraham, Palmer, Hampden, East Longmeadow, Chicopee, Holyoke etc then your rates are lower. You have less of a chance of hitting another car because there are simply less vehicles around.
Plus, in the higher populated areas the crime rate tends to be higher, such as car thefts, vandalism’s etc. which causes the car insurance rates to be a bit higher.
Year, Make and Model of Your Vehicle
The type of vehicle you have can greatly effect the price of your car insurance.
For instance, if you purchase an older vehicle say 10 years old or more, then you typically do not have to have Full coverage. You can get the car on the road with just basic liability which is the lowest cost insurance option available.
If you buy a newer car or even a brand new vehicle, then the way cars are made now they include lots of censors, cameras and computer chips throughout the interior and the exterior of the vehicle which makes them very expensive to fix in case of an accident.
Plus with a newer vehicle you may have a loan with a bank that helped you purchase the vehicle. In this case you are required to have Full coverage on the vehicle which means you have part 7 Collision and part 9 Comprehensive.
Part 7 Collision is the most expensive part on the policy. This part fixes your car if you cause the accident or get hit and run. Part 9 Comprehensive is more affordable as it covers Stolen, Vandalism, Fire dame or glass Breakage.
These two parts together make your coverage Full coverage and can make a policy very expensive depending on the other factors we discussed that make up the cost of your car insurance.
It is always recommended that a new driver get an older car to start so they can get just basic liability to keep their car insurance affordable and to assist them in learning how to drive properly.
What Kind of Insurance Coverage Do You Want or Need?
The answer to this question will depend on a few factors such as if you have a loan on your vehicle, if you own significant assets and the year, make and model of your chosen vehicle.
To start, if you have a loan on your vehicle you must get Full coverage. You can play with the pricing by going with higher deductibles but in the end you must maintain Full coverage until your car loan is paid off.
If you own significant assets such as a home, it is always recommended that you maintain higher limits on your liability insurance. Instead of getting the state minimums of $20,000 per person and $40,000 per accident you should always go for the higher limits of $100,000 per person and $300,000 per accident or more.
Lastly if you buy an older “beater” just to get around and you live in an apartment you can usually get away with just getting the state minimums to make the insurance affordable for your budget.
You can also decide on the optional extras like Towing, Rental Reimbursement and Medical Payments depending on your budget. Please discuss all these options with your local agent.
The Payment Method You Choose
Once your car insurance price has been established you can effect the monthly payment amount by choosing one of the many payment options.
- Paid in Full – this usually give a discount of 10% or more for the year.
- 2, 4 or 6 payment Plan – This plan can also give a discount over paying your car insurance each month over the course of a year.
- Automatic Bank Payments – this method will lower your down payment amount and give you equal monthly payments throughout the year.
- Payment by Mail – this method is a higher down payment and can cost you more for the year as most companies charge a $6 billing fee each month if they send you a bill through the mail. This method is popular because it gives clients more flexibility as to when they pay the bill as companies give any wheres between a 3 day to 9 day grace period.
How Much is Car Insurance?
There is a good summary of the cost of car insurance in Massachusetts and the factors that go into your price. Be sure to choose a good, trustworthy and knowledgeable local agent to discuss all of these factors with you.