Massachusetts manages to hover right near the national average for car insurance costs. Average might not sound impressive, but it’s quite a feat because Massachusetts is one of the few states with a no-fault insurance system. No-fault means your insurance company pays for your damages no matter who was at fault in the accident.
Most no-fault states are among the most expensive places to be insured. Even with its average premium costs, Massachusetts residents might still be paying more than they have to. By doing some research and shopping around, it’s possible to shave hundreds of dollars off your premium.
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Our Top 5 Picks for the Best Cheap Car Insurance in Massachusetts
Massachusetts’ Minimum Coverage Requirements for 2020
Massachusetts residents are required to have $20,000 of bodily injury coverage per person and $40,000 per accident, plus $5,000 of property damage liability coverage. The required uninsured motorist coverage is $20,000 per person and $40,000 per accident. Massachusetts is also one of the only states that requires residents to carry personal injury protection with a minimum of $8,000 per person, per accident.
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Why are rates so individualized?
It’s impossible to predict which company will have your cheapest plan. Insurance premiums depend on a bounty of data about you, such as where you live, your occupation, your driving record and the make and model of your vehicle. There are almost never two identical policies. Insurers feed your data to a proprietary formula that digests the information and spits out a premium.
The kicker is that every company’s formula and equation are different. Some may deem your vehicle’s age as a major cost influencer while another may put more weight on the mileage on the car. The point is, the only way to find out which company offers you the best deal is to get at least five different quotes and compare them.
How long does the quote process take?
Online quotes will typically take only about five minutes apiece. Be ready with all of your pertinent data on hand. If you aren’t sure about your average annual mileage or are fuzzy on the details of a recent claim, be sure to find out before starting the process. Over-the-phone quotes are another option, but certainly expect to add an extra 10 to 15 minutes to your budgeted time – and don’t forget to ask to have your quote emailed (or snail-mailed) to you for your personal records. You may also need to have your game face on for phone quotes. Some companies will give you the hard sell, and it’s tough to not give up after the fifth, “How much would that coverage add to my premium?” With an online quote, it is as simple as checking and unchecking a few boxes.
What criteria should you look for when choosing insurance companies for price comparison?
When you start your search, it’s recommended to find companies that have received “excellent” or “superior” grades from A.M. Best, an agency that measures companies’ financial stability. These companies should have also scored high in the latest J.D. Power customer satisfaction survey. Statistically speaking, you’ll probably be involved in a vehicular accident in your lifetime, and you don’t want lousy customer service or a long turnaround on a claim. That only adds stress to an already taxing situation.
Why are Massachusetts’ rates just average?
According to the Insurance Information Institute, Massachusetts ranks third for the fewest uninsured drivers of any state. There are also fewer fatal accidents than most other states, so why are the insurance rates only slightly below average? It comes down to high repair costs and the no-fault insurance system.
Massachusetts was found to have average auto repair costs compared with other states. But when you get into an accident, the repair bill can skyrocket. Once a repair bill tops the worth of the vehicle, an insurance provider will opt to “total” the vehicle and instead pay what it deems is the total worth of your car. Whenever there is a greater chance of a high payout by an insurance company, you can be sure you will see the repercussions in your premiums.
As a state with a no-fault auto insurance system, Massachusetts law dictates that your insurance pays for your damages, regardless of who was at fault in an accident. There is an exception for serious injuries or deaths, in which case the at-fault driver may still be sued. This system was originally intended to reduce auto insurance premiums and save the courts from a docket crammed full of petty civil suits. It may unburden the judicial system a bit, but studies have shown that no-fault states are actually prone to higher insurance costs than states following the more standard tort system.
What if you’re not a full-time resident?
If you’re not a Massachusetts resident, you don’t have to register your vehicle for the first 30 days you spend in state. However, if you operate your vehicle within the borders for more than 30 days out of the year (consecutive or nonconsecutive), you’re required to register your vehicle and comply with the state’s insurance laws. Military personnel on active duty are exempt from this rule as are nonresident students attending a Massachusetts university, though students must file a form with the Massachusetts Registry of Motor Vehicles.
What is SR-22 auto insurance?
An SR-22 auto insurance certificate is an official document that provides proof of a driver’s financial responsibility. It indicates that an individual is carrying the state’s legal minimum required amount of car insurance. Massachusetts is one of six states in the U.S. that does not require drivers to file an SR-22 form, but all vehicles must still carry the minimum amount of liability insurance as mandated by state law. However, you may need to file an SR-22 in order to reinstate your driving privileges if they were suspended due to a DUI conviction, driving while uninsured or other serious offense.
Is going with cheap car insurance the best option?
If you can afford it, getting more than the minimum coverage is always a great idea. Whenever you decide to shop around, don’t just compare the prices for minimum coverage — compare prices for a few upgraded coverages, as well. It’s also pretty surprising how much additional coverage you can add for a pretty low amount. If you’re hesitating, consider that approximately 6 million car accidents occur in the United States each year.
The average cost of a nonfatal but disabling injury is $93,800. If you have just basic, cheap car insurance and get into an accident like that, your insurance is going to pay $20,000 and leave you to cover the remaining $73,800. Massachusetts may be a no-fault state, but you can still be sued if you cause someone a permanent injury. You’d likely end up emptying your bank account to pay for the damages.
If you purchased some optional bodily injury coverage – let’s go with $50,000/$100,000, plus the compulsory $20,000/$40,000 required by state law – then you’re going to have to pay $10,000 out of pocket in the worst-case accident scenario above. That extra coverage would cost a bit more. Since, statistically speaking, you’re likely to have an accident once every 17.9 years and may possibly be taken to court, it might be preferable to put in the extra money for better coverage rather than face the risk of being held responsible for tens of thousands of dollars in damages.
What other coverage options are there?
The most common add-ons include bodily injury liability and underinsured motorist coverage. You may want to consider vehicle coverage as well. If you have a lease or loan on your vehicle, your lender will most likely require you to purchase collision and comprehensive coverage. It’s an insurance for them against the possibility of an accident that will total the vehicle (destroying what’s essentially still their property). Even if you own your car outright, it can be a good option to do the math on; without it, you’ll have to pay for repairs yourself.
What happens if you’re caught without insurance?
Hitting the road without insurance will result in a fine of between $500 and $5,000 and may also get you up to a year in jail or a year’s suspension of your driving privileges. If your license is suspended, you’ll have to pay an additional fee to reinstate it.
What is the main takeaway?
The only way to ensure you’re getting the best deal is to know what the other deals are. It’s as simple as that. Whether online, on the phone or with your agent, take the time to get some quotes. The results will be twofold. First, you’ll find better rates. Second, you’ll prevent being marked by insurers as someon
Finally, make sure to compare different coverages, not just the state minimum. Cheap car insurance is a tricky scenario, and it doesn’t always protect you like you want or think it will. By ponying up with a slightly higher rate now, you can avoid lengthy lawsuits, being without a car, emptying your savings and incurring massive debt.
It’s your turn to see how much you can save.
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Even If You’re Happy, It’s Still Best to Shop for a New Policy Every Couple of Years
Believe it or not, insurance companies base your rate on more than just risk; they also consider how likely you are to shop for a better deal. Using big data and algorithms you’d need a degree to understand, they pull things like your credit score and your online shopping habits to understand and predict your loyalty behavior. Furthermore, they quantify your sensitivity to cost increases and begin to adjust your premiums accordingly. The tactic is known as “price optimization.” Counter to all tenets of good customer service, your loyalty is exploited rather than rewarded. If your insurer believes you won’t look around for a better price, it will sneak a few extra dollars into your premium at every renewal period.
Shopping for a new policy every year or two is one of your best defenses against price optimization and the best way to avoid upcharges. The same data that tells your insurance company you bought a dress before it went on sale or that you’ve stuck with the same cell carrier for the past eight years also tells them you’ve been looking for quotes. Getting quotes will show insurers that you’ll go to whichever company offers you the best deal. The next time renewal comes around, perhaps they won’t be so tempted to pull an extra dollar or $10 from your pocket.
Many states count the practice as unfairly discriminatory and therefore unconstitutional. That’s a big accusation. Massachusetts has not yet followed suit with a bulletin or official statement. If you want to make sure that you won’t fall victim to price optimization, call your local agent and ask about your current insurer’s policy regarding it. If you want to take it a step further, make a call or write a letter to the Massachusetts Division of Insurance.
Meanwhile, you can shop around for a new policy to help keep your current rates low. You may even find attractive offers from other insurance providers during your search, such as “good driver” discounts. You may qualify if your record shows you have gone accident-free or violation-free for a few years. If you are a young driver, you may be eligible for a student discount if you are under 25 and can show an insurance company proof of good grades.
If you are a driver with a subpar credit score, you still have options when shopping around for quotes. You may want to look into companies that specialize in high-risk drivers, as you will generally get a better rate with them.
Best Car Insurance in Massachusetts
- Liberty Mutual