In Massachusetts, the law requires that you have valid liability insurance in place before registering your car or driving on the road. This law is meant to protect all residents, so drivers are financially responsible for any harm from accidents they may cause others or themselves. With an auto insurance policy, you are also protected by the no-fault law, which mandates auto insurance companies to cover your own medical expenses regardless of fault. Nevertheless, you can use one of the acceptable alternatives to a policy as your proof of financial responsibility.
When you register your car, the Registry of Motor Vehicle (RMV) will ask you to submit a RMV-1 form; there is an Insurance Certification section, where your insurer needs to sign and stamp to verify your financial responsibility. However, you should still have your insurance ID card with you whenever you drive just in case a law enforcement officer asks for it.
|Massachusetts Required Car Insurance Coverage||MA Required Min. Limits|
|Bodily Injury (BI)||$20,000 per person / $40,000 per accident|
|Property Damage (PD)||$5,000 per accident|
|Personal Injury Protection (PIP)||$8,000 per accident|
|Uninsured/Underinsured Motorist BI (UM/UIMBI)||$20,000 per person / $40,000 per accident|
Massachusetts Car Insurance Minimum Requirements
Your valid Massachusetts auto insurance policy must always include 4 kinds of coverage: Bodily Injury, Property Damage, Personal Injury Protection, and Uninsured Motorist coverage. Here is a list of the protection you can expect to have under a mandatory insurance policy, with the minimum amount of coverage (limits):
Bodily Injury (BI) 20/40: with minimum limits of 20/40, for every accident you cause that results in somebody’s injury, your insurer will pay them up to a maximum of $20,000 per person, for a total cap of $40,000 per crash. BI is one of the two liability insurance coverages, and is a third-party coverage that pays out to the other party.
Property Damage (PD) $5,000: for every accident you cause that involves some form of property damage – whether it is damage to the other driver’s car or public property on the streets – your insurer will pay no more than $5,000 for all the damage, unless you have purchased a higher limit (the maximum payout they can claim), such as $10,000 or higher.
Personal Injury Protection (PIP) $8,000: also known as the no-fault insurance, PIP is what covers you for your own medical expenses in the event you and/or your family members are injured in an auto accident. No matter who causes the accident, each person is entitled to a total of $8,000 coverage per accident. An additional benefit you may receive with your PIP in Massachusetts is 75% of your lost income in (up to $8k), if recovery prevented you from going to work. PIP is usually one of the costliest coverage on your policy, but insurers are required to provide you with two options that can lower your car insurance rates in Massachusetts:
- Choosing a Deductible: a PIP deductible means you are choosing to bear a portion of the $8,000 coverage on your own. It will be an incremental amount ranging anywhere between $300 and $8,000. This deductible only applies when the primary driver on the policy is making the claim. In other words, whether or not you have a PIP deductible, each of your family members (if covered) are each entitled to the full $8,000 coverage.
- Covered Personnel: usually, PIP covers both you AND any family member living with you. If you do not have any family member in the same household, then you may want to consider excluding that part of the coverage in Massachusetts. This option will give you a lower PIP premium.
Uninsured / Underinsured Motorist Bodily Injury (UM/UIMBI) 20/40: when you are hurt in an accident that is caused by a driver without sufficient liability insurance, UM/UIMBI gets your insurer to cover you for the missing payments in the other driver’s insurer's place (hence it has the same limits as a minimum BI). Note that MA insurance law prevents you from buying a higher UM/UIMBI limits than the BI limits on the same policy.
Alternative Proof of Financial Responsibility
Although a liability insurance policy is the easiest and most recommended way to fulfill your insurance requirements, there are two other alternatives that the RMV will accept as your proof of financial responsibility behind the wheel in Massachusetts.
Liability Bond: with a surety bond that is payable for $20,000 of medical expenses per person injured (to a total of $40,000 for two or more persons), and a $5,000 property damage expense coverage per accident, your insurance obligation is considered fulfilled. As long as the surety company that issues the bond is licensed in MA, a certificate of insurance by them will be valid proof.
Liability Deposit: by making a $10,000 worth of deposit with the state Treasurer, in either cash or securities (such as a government bond or note), you are good to go. However, whenever this deposit is tapped to satisfy a judgment against you or payment you owe to others, the Treasurer will ask you for additional deposit until the total amount is back to $10,000. The good thing is, the Treasure must put your deposit into either a savings account or some kind of loan account, and you can keep the interests.