All drivers must purchase auto insurance in Massachusetts to avoid hefty fines. However, business owners do have a choice in the level of insurance that they purchase to cover their vehicles. They can purchase the bare minimum coverage for PIP, BIL and UM, or they can choose a higher amount of coverage. More coverage can mean higher premiums, but you'll end up paying less in the event of an accident. Take the time to make sure that you understand the popular insurance words and how they apply to auto insurance in Massachusetts.
Uninsured motorist coverage (UM)In most cases, both parties in an accident will have car insurance, which will take care of expenses. However, Massachusetts require drivers to carry uninsured motorist coverage in the event that one party does not have insurance. This will cover expenses in hit-and-run accidents as well. Drivers should have at least 20/40 coverage.
Bodily injury liability (BIL)Bodily injury liability, sometimes abbreviated as BIL or just BI, is insurance coverage for any harm that you cause to a person in the event of an accident. Massachusetts law requires you to have at least 20/40 coverage.
Personal injury protection (PIP)Personal injury protection goes beyond covering medical damages to also cover things such as income loss or child care expenses. Massachusetts is one of the few states that requires PIP, at a level of up to $8,000.
Property damage liability (PDL)Property damage liability covers the amount of damage caused to personal property during an accident. In Massachusetts, drivers should carry at least $5,000 for property damage liability.
20/40/5A number sequence such as 20/40/5 represents a state's required level of insurance. The first number is the maximum BIL for one person in an accident. The second number is the maximum BIL for the entire accident. The third number is for property damage. Massachusetts has a 20/40/5 requirement, which means that a driver must have at least $20,000 BIL for one person, $40,000 BIL for the whole accident and $5,000 for property damage. Some calculations do not include the property damage requirement and may look like 20/40.
Massachusetts Automobile Insurance Plan (MAIP)If a driver cannot get insurance through a typical insurance company, he or she can obtain it through the Massachusetts Automobile Insurance Plan, or MAIP. This is a reinsurance plan designed to reduce the risk for auto insurance companies that provide insurance to high-risk drivers. All companies that provide auto insurance in Massachusetts must accept MAIP.
Massachusetts Government website.