Many car owners choose (or can only afford) to purchase the minimum amount of insurance coverage required by state law. In the Commonwealth of Massachusetts, the mandatory minimum liability insurance required is $20,000 per personal injury per person, $40,000 per accident and $5,000 for property damage. Car accident attorneys normally express these figures as 20/40/5.
This means if there is an accident, and the at-fault driver has the minimum required insurance, the most the policy will pay any single victim for his or her injuries is $20,000. If there were two victims, the second victim could also be paid up to $20,000. If there are three victims, the third victim will not receive $20,000 because of the $40,000 per accident limit. There will probably be a third of $40,000 paid to each claimant assuming all had injuries of more than $20,000.
The $5,000 limit is the most the company will pay to fix the victim’s car. Obviously, this may be much less than the cost of fixing a car, but many also have comprehensive coverage on their own vehicles.
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