Auto insurance in Massachusetts is not getting cheaper, so it may not be a great time to tell you to increase your UM/UIM coverage – but it’s important.
Here’s why: Auto insurance premiums have recently hit a national average of $1,427, according to The Washington Post. This is for a few different reasons, including catastrophic weather (which increases the number of crashes). However, as the Post reported, one’s college degree or credit score may actually have more bearing on how much your car insurance costs than your actual driving record, given the complex and often opaque formulas used by auto insurers. What this boils down to is that people who might really need insurance are going to either skimp on coverage, buying only the bare minimum required by law, or they aren’t going to buy any at all and take their chances getting caught.
The Insurance Information Institute reports that from 1992 to 2015, the estimated percentage of uninsured motorists nationally ranged somewhere between 16 percent and 13 percent. Florida had the highest rate of uninsured motorists (27 percent), while Massachusetts had one of the lowest (6.2 percent). Here, state law requires motorists carry a minimum:
- $20,000 per individual in bodily injury liability and property damage
- $40,000 per crash for bodily injury liability and property damage
- $5,000 in personal injury protection (PIP) benefits
MGL ch. 175 section 113L also requires that auto insurers offer uninsured motorist (UM) coverage standard in their packages, though policyholders have a choice to decline it. Most people keep it because opting out means if you are involved in a serious crash with another driver and it’s their fault and they have no insurance or they flee the scene and you never locate them (hit-and-run), YOU will be stuck with the medical bills and lost wages, likely with few options for recovering damages. There is also a common UIM (underinsured motorist) option that allows people to recover damages from their own insurer in the event you are involved in a Boston car accident wherein someone else is to blame, but their coverage is not sufficient to cover all of your damages.
Given the higher auto insurance rates and the fact that more people are going to have bare minimum coverage – or none at all – drivers in Boston would be wise to discuss upping their UM/UIM coverage with their insurance agent.
Why Are Auto Insurance Rates so High?
A recent report by The Zebra (a site that allows people to shop for auto insurance) looked at some 50 million quotes in order to compile its yearly “State of Auto Insurance” report. What they found was a huge variation – as much as 6,500 percent – between those who pay the lowest car insurance and those who pay the highest. The reason for these disparities is because of several rating factors used by insurers to determine how great of a risk you are. These can include things like your age, your gender, what kind of car you drive and where you live.
With 650 insurance companies and a variation of some 43,500 rating factors, it’s almost impossible to know how much any one person’s rate will be. The Zebra described the state of auto insurance today as:
- Expensive. It’s 20 percent higher than it was in 2011. Some cities in the U.S. have an average rate of $6,000 annually.
- Volatile. While some states have seen increases of 60 percent or more on rates, others have grown by as little as 1 percent. Variations in rate changes year-over-year on average fluctuated about 8 percent, but in some states, swung as widely as 45 percent.
Some of the external factors that can impact one’s auto insurance rate includes:
- Weather. Blizzards. Hurricanes. Tornadoes. Fires. All of these can lead to more insurance claims being filed, which in turn prompts insurers to raise rates.
- Crime and population. Vehicle theft rates are one factor, as is traffic congestion. Those areas with higher rates of uninsured drivers are also likely to pay higher rates.
- Legislation. Every state regulates insurance on its own and local laws restricting the type of information insurers can have (credit score, education level, owner/ renter of home, etc.) can have an impact, just the way a lack of these laws will also be a factor.
- Behavior and economy. Your driving record will inevitably impact how much your insurance costs because insurers are trying to determine your potential risk. Those with a track record of poor driving tend to have a greater chance of being involved in a crash in the future. Gas prices too can impact costs; lower gas prices lead to more driving which leads to more accidents and insurance claims which leads to higher rates.
Unfortunately, while these other factors may drive up costs, insurers aren’t taking steps to reduce costs appreciably for those who are involved in programs that provide real-time data on their driving habits or for other initiatives. Another problem is: People are becoming worse drivers. Distraction is a major factor, mostly a result of rising cell phone use.
How Massachusetts UM/UIM Helps
Although the law does not require you to purchase UM/UIM coverage in Massachusetts, it’s a very good idea to accept it – and consider taking on as much as you can financially muster. UM coverage will give you compensation for losses as well as pain and suffering for you and any household member who was injured while occupying your vehicle, occupying a vehicle you don’t know or as a pedestrian. Others injured in a car insured by UM carrier may also be covered. This coverage gives you an important way to recover damages when a driver with no insurance causes a Boston car accident.
UIM coverage goes a step further and provides excess coverage in the event the at-fault driver isn’t carrying enough insurance to cover your losses. With higher insurance costs, we’re likely to be seeing a lot more of these type of cases.
Although this coverage may cost you more per month, consider that many victims of serious crashes don’t walk away with medical bills under $100,000. That is before we start to factor in lost wages and pain and suffering. If a driver does not have insurance or doesn’t have enough, you will be the one left holding the bill unless you have adequate UM/UIM coverage.
If you are injured in an accident in Massachusetts, call Jeffrey Glassman Injury Lawyers for a free and confidential appointment — (617) 777-7777.
Auto insurance rates have skyrocketed — and in ways that are wildly unfair, Feb. 7, 2018, By Fredrick Kunkle, The Washington Post
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Charter Bus Crash Underscores Danger, Liability Issues, March 13, 2018, Boston Car Accident Attorney Blog