Auto Insurance Excess: What Massachusetts Drivers Need To Know

Excess auto insurance is an important consideration for drivers in Massachusetts who use their vehicles for business purposes, such as delivering pizzas or ride-sharing services like Uber and Lyft. While a personal auto insurance policy may provide adequate coverage for everyday driving, it typically excludes coverage for commercial activities. This means that if you're involved in an accident while using your vehicle for business purposes, your personal auto insurance may not provide the necessary protection. In such cases, you would need to purchase excess auto insurance to ensure you have the appropriate level of coverage. This type of insurance is designed to fill the gaps left by your personal auto insurance policy and provide additional protection specifically for business-related activities. It's important to note that the requirements and regulations for excess auto insurance can vary, so it's always a good idea to consult with an insurance professional to ensure you have the right coverage for your specific needs.

Excess coverage for business use

In Massachusetts, motorists are required to purchase certain insurance policies for their vehicles. However, it is often recommended that drivers also consider purchasing excess coverage to protect themselves financially in the event of an accident.

Excess liability insurance is a type of insurance that provides additional coverage on top of your existing insurance policy. It increases the limits of your current policy, offering financial protection for claims that exceed the original policy's limit. For example, if you have a $2 million general liability insurance policy and face a $2.75 million claim, an excess liability policy of $1 million would cover the additional $750,000, providing higher policy limits.

Excess liability insurance is particularly important for businesses, as it can protect them from catastrophic losses and claims that exceed the coverage limits of their primary insurance policies. It is a cost-effective way for small business owners to increase their coverage limits and reduce the risk of a lawsuit bankrupting their business.

When it comes to business use, excess liability insurance can be applied to various types of policies, such as general liability insurance, commercial auto insurance, and employer's liability insurance. For instance, commercial auto insurance typically covers bodily injury or property damage claims resulting from driving a company vehicle. By adding excess liability coverage, you can increase the dollar limit on this primary insurance policy, providing additional financial protection in the event of a major accident or claim.

When considering excess coverage for business use, it's important to work with an insurance agent or broker to understand the specific policies available and their limitations. The cost of excess liability insurance will depend on factors such as the limits of the policy, the amount of your underlying policy, and the nature of your business.

MAIP eligibility

The Massachusetts Auto Insurance Plan (MAIP) is a way for drivers to obtain auto insurance if they are unable to find an insurance company that will provide them with a policy. MAIP is not an insurance company and cannot provide premium quotes. If you are denied coverage by an insurance company, you become eligible to apply for coverage through MAIP.

To be eligible for MAIP, you must first try to find coverage in the voluntary market, either through an agent or directly from a company. If you are unable to find a company that will provide you with a policy, any insurance agent can assist you in applying for MAIP. You will need to fill out an application, and the agent will submit it to MAIP on your behalf. It is important to note that you cannot choose which company you are assigned to within MAIP.

Once you are assigned to a company through MAIP, you may qualify for group and other discounts offered by the company. However, you may need to fill out an additional application to determine your eligibility for these discounts. The company assigned to you through MAIP is required to offer coverages and services comparable to those provided to drivers in the voluntary market. The rates charged by the assigned company will be either the MAIP rate or the company's voluntary rate, whichever is lower.

It is important to maintain a clean driving record and drive safely to improve your chances of being offered coverage voluntarily by an insurance company. You can switch insurance companies at any time, but you may have to pay a penalty for cancelling your policy early.

Required minimum limits

In Massachusetts, drivers are legally required to carry minimum coverage auto insurance to register and drive a vehicle. The minimum coverage amounts are as follows:

Bodily Injury to Others

This coverage protects you or someone you allow to drive your car from legal liability if you accidentally injure or cause the death of someone else while operating your car. It is important to note that this coverage only applies to accidents that occur in Massachusetts and does not cover the injury or death of a passenger in your car. The required minimum limit for this coverage is $20,000 per person and $40,000 per accident.

Personal Injury Protection (PIP)

PIP coverage pays for medical expenses, up to 75% of lost wages, and replacement services up to a limit. In Massachusetts, the required minimum limit for PIP coverage is $8,000 per person, per accident. As a no-fault state, Massachusetts requires PIP coverage to pay these expenses regardless of who is at fault in an accident. This coverage extends to you, anyone you allow to drive your car, anyone living in your household, passengers in your vehicle, and pedestrians.

Bodily Injury Caused by an Uninsured Auto

This coverage protects you, anyone you let drive your car, household members, and passengers (who are not covered under another similar Massachusetts policy) against losses caused by an uninsured or unidentified ("hit-and-run") driver. The required minimum limit for this coverage is $20,000 per person and $40,000 per accident.

Damage to Someone Else's Property

Also known as Property Damage Liability coverage, this coverage pays for damage to another person's property when you, a household member, or another driver you allow to use your car causes accidental damage. The required minimum limit for this coverage is $5,000.

These required minimum limits for auto insurance in Massachusetts are often referred to as the state's "20/40/5" liability limits, with the numbers representing the minimum coverage amounts for bodily injury liability per person, bodily injury liability per accident, and property damage liability per accident, respectively.

Discounts and benefits

Excess auto insurance is a necessity in Massachusetts, and while the rates can be high, there are many discounts and benefits available to drivers.

When shopping for auto insurance in Massachusetts, it is important to ask about discounts and benefits, as these can significantly impact your premium. Some common discounts include:

• Multi-car policies: Insuring multiple cars with the same company can often lead to a discount.
• Good student: If you have a student on your policy who is performing well academically, you may be eligible for a discount.
• Low annual mileage: If you don't drive your car frequently, you may be able to get a discount on your premium.
• Safe driving: Maintaining a clean driving record without accidents or traffic violations will typically result in a lower premium.
• Safety features: Having safety features such as passive restraint systems, anti-theft devices, and airbags can qualify you for discounts, some of which are required by law.
• Age: Drivers who are 65 years or older are often eligible for discounts, as required by law.
• Group programs: Many insurance companies offer discounts to members of certain groups, such as employees of a particular company or members of a motor club.
• Bundling: If you own a home or rent, you may be able to get a discount by bundling your auto insurance with a homeowner's or renter's insurance policy.

In addition to these discounts, there are also various benefits that may be included in your auto insurance policy in Massachusetts. These benefits can provide valuable protection in the event of an accident or other covered incident. Some possible benefits include:

• Personal Injury Protection (PIP): This coverage pays for medical expenses, lost wages, and replacement services up to a limit of $8,000. It applies regardless of who is at fault in an accident and covers you, your household members, passengers in your vehicle, and pedestrians.
• Bodily Injury Caused by an Uninsured Auto: This coverage protects you and your household members if you are in an accident with an uninsured or unidentified driver.
• Damage to Someone Else's Property: This coverage, also known as Property Damage, pays for accidental damage caused to another person's property.
• Comprehensive and Collision Coverage: These optional coverages pay for damage to your vehicle caused by collisions or other incidents such as fire, theft, or vandalism.
• Medical Payments Coverage: This coverage pays for medical expenses and funeral services for anyone in your vehicle resulting from an accident.
• Substitute Transportation: If your vehicle is being repaired due to a covered claim, this coverage provides reimbursement for rental car or other substitute transportation expenses.
• Roadside Assistance: This benefit can provide assistance if your vehicle breaks down, including services like towing and labor.

It is important to carefully review the specific discounts and benefits offered by different insurance companies in Massachusetts to find the best coverage for your needs at the most affordable price.

Claim settlement time

In Massachusetts, there is no specific timeline for the settlement of auto insurance claims. However, insurance companies are legally required to pay all claims in a "prompt and reasonable" amount of time. This duration can vary depending on the circumstances of each claim and may be influenced by factors such as the need for a more thorough investigation or external factors like bad weather, which can cause a higher volume of claims.

In the context of auto insurance claims, Massachusetts is a no-fault state. This means that individuals must first file a claim with their own insurance company for Personal Injury Protection (PIP) compensation before pursuing additional damages against the other driver or their insurance company. The PIP coverage in Massachusetts provides up to $8,000 for medical expenses, lost wages, and replacement services.

If an individual wishes to step outside the no-fault system and pursue a claim directly against the at-fault driver, they must meet certain conditions. These conditions include incurring at least $2,000 in reasonable medical expenses and suffering injuries such as permanent disfigurement, substantial loss of hearing or sight, or fractured bones.

When it comes to claim settlement time, it's important to note that insurance companies have a good faith obligation to promptly address claims. While there is no exact timeline, a reasonable duration is expected, and external delays should not hinder the process.

Frequently asked questions