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Massachusetts typically has more than one hundred thousand motor vehicle crashes every year. This is the first in an upcoming series of articles about car crashes, how to reduce your chances of being in one, what to do if you are involved in an accident, and how to protect yourself financially if you are involved in a car accident.
To get started, let’s take a look at how cars are insured in Massachusetts. This is not a glamorous topic but it is of the utmost importance so that you will be financially protected if an unfortunate accident occurs. Most car insurance companies use a standardized insurance policy called the Massachusetts Automobile Insurance Policy. This policy is updated periodically to clarify earlier versions and to address new kinds of situations in which accidents occur. For example, one of the updates in the 2016 edition contains important terms that address the use of private passenger vehicle as a “vehicles for hire” such as when the owner gets into an accident while working for companies such as Uber and Lyft. The 2016 edition of the standard policy can be viewed at the Automobile Insurers Bureau website. When reading it though, keep in mind that the insurance policy is a complex legal document that has been the subject of many lawsuits and is likely to be the subject of many more in order to interpret how it applies in unusual situations. For that reason, if you are in the process of buying car insurance I cannot emphasize enough that it is best to take the time to meet personally with an experienced independent insurance agent to make sure that the insurance on your personal car, truck or SUV is properly tailored for you.
Another consideration is choosing the best car insurance company for your needs. The recommendation of your local independent insurance agent can be invaluable, not only for pricing but also for advice about the insurance company’s customer satisfaction history in handling accident claims. Your insurance agent sees claims being filed with, and handled by, insurance companies on a daily basis so the agent can often gauge whether the claims are being resolved satisfactorily. Insurance company advertisements touting their own high customer satisfaction survey results are hard to rely upon because it often is not clear whether the survey was taken shortly after the friendly application process or whether the survey was taken after claims were filed and perhaps denied. As you can imagine, customer satisfaction in these two different situations could be very different.
The complexity of the auto insurance policy also means that if you are involved in an accident, you should immediately contact an accident injury lawyer to make sure that your recovery rights under your own auto insurance policy as well as your financial rights against the other driver’s insurance company are protected. There are several time limits that apply to different phases of car accident cases and surprisingly, in one circumstance the current time limit in 2016 is an extremely short twenty-four hours after a crash.
Unfortunately, many injured people who believed that they had “full coverage” and who relied on the other driver to have sufficient insurance find out after an accident that the coverage is not enough to compensate for their financial harm such as lost wages and damage to their vehicle, or for their personal harm if they have suffered a serious debilitating injury. The term “full coverage” is a dangerous term because it has no defined meaning. If you see or hear that term when you are buying car accident insurance it should be a red flag for you to ask specific questions about what you are purchasing. Keep in mind that your insurance policy is divided up into twelve subsections known as Part 1, Part 2, etc. Every year when you purchase car insurance, your insurance company will send you what is called the “Coverage Selections Page” which tells you which of the twelve parts you have purchased and, very importantly, the dollar amount of insurance in each part. When you receive it, double check with your local insurance agent to make sure it includes everything that you and your agent intended.
This article will summarize Parts 1 through 4 of your auto accident insurance policy. These four parts are known as “Compulsory Insurance” which means that you are required by law to purchase these categories in order to legally register your vehicle. Massachusetts law not only requires you to purchase these four categories but it also requires you to purchase at least a certain minimum dollar amount in each category. We will look as some examples below but for now the important consideration to keep in mind is that purchasing only the minimum required by law is a risky proposition that should be avoided if at all possible.
Part 1 is titled: “Bodily Injury To Others.” If you accidentally injure someone under certain conditions with your vehicle, money is available under this part to compensate that person for his or her bodily injury. This part has some serious limitations, including but not limited to the fact that it pays only for accidents that occur in Massachusetts. Another limitation is that the maximum dollar amounts available under this part are known as: “$20,000 per person, $40,000 per accident.” What this means is that the most your insurance would pay to any one person you accidentally injured would be $20,000 and the most it would pay in total if more than one person were injured would be $40,000. So, for example, if two people were injured there would be $20,000 of coverage for each of them. If, however, three or more people were injured, the $40,000 “per accident” limit would mean that they have to divide the $40,000 of coverage three (or more) ways. If there were serious injuries, and extensive time out of work with lost pay, the injured person’s claim easily could exceed the “$20,000 per person, $40,000. per accident” insurance coverage. Unless you purchase additional insurance under other parts of the policy on the advice of your car insurance agent, this could result in the injured person(s) making a claim to force you pay them out of your personal funds. The reverse problem- protecting yourself financially in a situation where you are injured by a negligent driver who does not have enough insurance to fairly compensate you will be the topic of an upcoming article in this series.
Part 2 is titled: “Personal Injury Protection.” As the policy states, this part provides insurance benefits to pay a certain portion of the medical bills, lost wages and replacement services for you or anyone injured while in your car with your consent. Depending on what kind of health insurance you have, these benefits can go up to $8000. These benefits, known as “PIP” benefits are payable regardless of whether the driver of your car is legally responsible for causing the accident. Some insurers will offer to let you purchase the PIP coverage with a deductible. A PIP deductible can have serious negative consequences that include not only your being personally responsible for part of your medical bills but also include devaluing your claim against another driver who is found to be legally responsible for your injuries. Therefore, a PIP deductible should be avoided whenever possible. If financial considerations force you to consider a PIP deductible, analyzing the cost-effectiveness of selecting a PIP deductible should be done only with the assistance of your insurance agent.
Part 3 is titled: “Bodily Injury Caused by an Uninsured Auto.” This part also is “compulsory” in the amount of “$20,000 per person, $40,000. per accident.” These amounts are available to pay yourself and your household members for your injuries if the legally responsible driver was violating the law by driving without auto insurance. Part 3 also pays if you or a household member is injured as a pedestrian or if injured by a hit-and-run driver. Since a hit-and-run driver is, by definition, an unknown driver and since his or her auto insurer cannot be identified, the hit-and-run driver is considered to be legally “uninsured.”
Part 4 is titled “Damage to Someone Else’s Property.” This part is available to pay someone else if their property is damaged due to an accident that arises “from the ownership, maintenance or use of an auto, including loading and unloading.” You are required to purchase at least $5000 of coverage under this part. Part 4 is the last of the “compulsory parts.”
Next time we will move on to discuss some of the optional car insurance parts of the standard policy. While they are legally optional under Massachusetts law, as a practical matter they should not be overlooked nor omitted from any prudent car owner’s policy.
Atty. Robert Shute represents injured accident victims on all kinds of accidental injury cases in the Pioneer Valley of Western Massachusetts and throughout Massachusetts. You can view his website at www.RobertShute.com and you can reach him in Hampden County at 413-592-0999 and in Hampshire County at 413-437-7788 for a cost-free consultation about your accidental injury questions.
(December 15, 2016)