“Buying Your Massachusetts Automobile Insurance” has been
\nprepared for you by the Massachusetts Division of Insurance as
\npart of our continuing effort to inform consumers on the
\ndetailed and sometimes complex aspects of purchasing automobile
\ninsurance in the Commonwealth. This guide outlines the basic
\nautomobile coverages you are required by law to purchase, as
\nwell as the coverages available to you on an optional basis.
\nWe have also included a description of the newly amended Safe
\nDriver Insurance Plan – the Commonwealth’s merit rating plan
\nwhich offers premium credits to policyholders who practice safe
\ndriving habits. Furthermore, this guide provides information
\non filing complaints and money-saving tips for reducing your
\npremium without sacrificing insurance protection. <\/p>\n
If you receive this pamphlet after you purchase your 1990
\nautomobile insurance and you wish to make changes in the
\ncoverage, limits, deductibles or discounts, contact your agent
\nor company. They can assist you. If you are not satsified
\ncall us. Our Consumer Service Section can be contacted at
\n(617) 727-7189, X 300.<\/p>\n
As you know, the Automobile Insurance Reform Act of 1988
\nsucceeded in updating our no-fault system, lowered the costs of
\nrepairing damaged vehicles, expanded consumers’ choices and
\ninitiated long-term, cost-saving efforts that will benefit
\nconsumers into the 1990s. <\/p>\n
The 1988 Reform Law addressed the rising costs in the system
\nthrough both tort law changes, such as the increase in the tort
\nthreshold from $500 to $2000, and coverage changes, including
\nthe increase in Personal Injury Protection (PIP) from $2,000 to
\n$8,000, and the coordination of benefits between health
\ninsurance and PIP coverage. Consumers have realized reduced
\npremiums from additional coverage changes and newly available
\ndiscounts. The Reform Law increased the standard deductible
\nfrom $300 to $500 for both collision and comprehensive
\ncoverages and created an optional $100 glass deductible. Also,
\nadditional rated reductions are now available for consumers
\nwhose vehicles are equipped with both an anti-theft device and
\nan auto recovery system, and for cars equipped with air bags or
\npassive restraint devices. <\/p>\n
A new Safe Driver Insurance Plan will mean substantially
\nreduced premiums for long time good drivers. <\/p>\n
This year, a new Safe Driver Insurance Plan takes effect. The
\naim of the Plan is to make the Massachusetts merit rating
\nsystem more fair by ending the subsidization of unsafe drivers
\nby good drivers. The Plan, known as a “bonus malus” system,
\ncan be compared to a ladder. The bottom of the ladder
\nrepresents the lowest premiums and the top of the ladder
\nrepresents the highest premiums. Drivers will be assigned
\ncredits and surcharges that are a percentage of the premium for
\nspecific coverages. Each year, drivers with an incident-free
\nrecord move down one step on the ladder and earn a premium
\ncredit. Drivers who have at-fault accidents or certain traffic
\nviolations move up the ladder a number of steps equal to the
\nnumber of unsafe driver points assigned and will be assessed a
\nsurcharge for each point. Each step up or down the ladder is
\nequal to 7% of the driver’s premium for liability coverage
\n(bodily injury, PIP, and property damage liability) and 5% of
\nthe premium for collision coverage. <\/p>\n
BUYING YOUR MASSACHUSETTS <\/p>\n
AUTOMOBILE INSURANCE<\/p>\n
1990<\/p>\n
MICHAEL S. DUKAKIS
\n Governor of Massachusetts<\/p>\n
TIMOTHY H. GAILEY
\n Commissioner of Insurance<\/p>\n
Commonwealth of Massachusetts
\n Division of Insurance<\/p>\n
CONTENTS<\/p>\n
1. COMPULSORY COVERAGES
\n Part 1: Bodily Injury to Others………………
\n Part 2: Personal Injury Protection……………
\n Part 3: Bodily Injury Caused by an
\n Uninsured Auto………………………
\n Part 4: Damage to Someone Else’s Property……..
\n2. OPTIONAL COVERAGES
\n Part 5: Optional Bodily Injury to Others………
\n Part 6: Medical Payments…………………….
\n Part 7: Collision…………………………..
\n Part 8: Limited Collision……………………
\n Part 9: Comprehensive……………………….
\n Part 10: Substitute Transportation…………….
\n Part 11: Towing and Labor…………………….
\n Part 12: Bodily Injury Caused by an
\n Underinsured Auto……………………
\n3. SAVING MONEY…………………………………….
\n4. 1990 SAFE DRIVER INSURANCE PLAN……………………
\n5. FILING A COMPLAINT……………………………….<\/p>\n
FROM THE COMMISSIONER <\/p>\n
“Buying Your Massachusetts Automobile Insurance” has
\nbeen prepared for you by the Massachusetts Division of
\nInsurance. This guide contains a description of the basic
\ncoverages you are required by law to purchase, as well as the
\ncoverages available to you on an optional basis. We have also
\nincluded information on filing complaints and money-saving tips
\nfor reducing your premium without sacrificing insurance
\nprotection.
\n Many motorists pay a higher premium than they should
\nbecause they choose coverages that do not suit their needs.
\nThe most common and costly mistake consumers make when buying
\nautomobile insurance is to renew their policy without assessing
\nhow their individual insurance needs might have changed.
\nInstead, before you renew your policy, reevaluate your
\ninsurance choices and your eligibility for the many discount
\nopportunities. Also, buy only the coverage you need and select
\ndeductibles you can afford.
\n The Safe Driver Insurance Plan (SDIP), which offers
\npremium credits to motorists who practice safe driving habits,
\nhas been significantly changed for 1990. Although automobile
\ninsurance will always be expensive in an urban, densely
\npopulated state like Massachusetts, you can reduce the cost of
\nyour premium an average of $140 by driving safely and
\nmaintaining an incident-free driving record. Although the Plan
\nis complex, I urge you to read Part 4 of this guide carefully
\nfor information on the Plan’s many new improvements.
\n Please keep in mind that this guide is not meant to be a
\nsubstitute for the Massachusetts Automobile Insurance Policy.
\nAlways refer to your Policy for the exact terms and conditions
\nof your automobile insurance. If you receive this guide after
\nyou have renewed your policy for 1990, and you wish to make
\nchanges in your coverage, limits, deductibles or discounts,
\ncontact your agent or company. They can assist you in making
\nthe necessary changes. If you need further information on
\nautomobile insurance, contact the Division of Insurance at 280
\nFriend Street, Boston, MA 02114 (617) 727-7189 or 436 Dwight
\nStreet, Room 338, Springfield, MA 01103, (413) 784-1190. <\/p>\n
Timothy H. Gailey
\n Commissioner of Insurance<\/p>\n
COMPULSORY COVERAGES<\/p>\n
Since 1927, under Massachusetts insurance law, motorists
\nhave been required to purchase compulsory motor vehicle
\nliability insurance. All registered motor vehicles in the
\nCommonwealth must be insured under Parts 1, 2, 3 and 4 of the
\nMassachusetts Automobile Insurance Policy. When you buy this
\ninsurance, you receive financial protection in case you become
\ninvolved in an accident.
\n Of course, not all insurance-buying decisions are simple
\nor clear-cut, because you cannot predict the future. When in
\ndoubt, remember that it is more important to have insurance
\nagainst large losses which could threaten your standard of
\nliving than smaller losses that you can afford to pay yourself. <\/p>\n
Compulsory Coverages
\n Part 1: BODILY INJURY TO OTHERS will pay for the damages
\nto anyone injured or killed by your auto in Massachusetts up to
\na limit of $10,000 per person and $20,000 per accident.
\n Part 1 applies whether your auto is being driven by you
\nor by someone else with your permission. However, this
\ncoverage never covers injuries to the driver of your auto or to
\nguests in your auto.
\n Limits higher than $10,000 per person and $20,000 per
\naccident and coverage for injuries incurred by guest occupants
\nof your auto and for out-of-state accidents may be purchased
\nunder Part 5. <\/p>\n
Part 2: PERSONAL INJURY PROTECTION (PIP), provides
\npayment of up to $8,000 to you, anyone driving your auto with
\nyour consent, anyone living in your household, passengers in
\nyour auto and pedestrians struck by your auto, for expenses
\nincurred as the result of an accident, without regard to
\nfault. PIP pays for medical expenses, replacement services and
\n75% of any lost wages.
\n If you already have good health insurance and disability
\nhealth plans – provided by your employer, for example – you
\nshould consider taking a deductible and excluding yourself and
\nthe members of your household from this coverage. However,
\nremember that even with a comprehensive health insurance plan,
\nyou would not be provided with coverage for lost wages and
\nreplacement services, unless your employer offers a wage
\ncontinuation program. <\/p>\n
Even with a large deductible for you and members of your
\nhousehold, guests in your automobile and pedestrians are still
\nfully covered.<\/p>\n
Part 3: BODILY INJURY CAUSED BY AN UNINSURED AUTO
\nprotects you, members of your household, and guests in your
\nautomobile against losses caused by an uninsured automobile, or
\nfrom a hit-and-run accident, unless the household member or
\nguest is protected by their own or another auto insurance
\npolicy. In addition, this coverage protects you and members of
\nyour household as pedestrians against injuries caused by an
\nuninsured auto or a hit-and-run driver.
\n Compulsory uninsured automobile coverage requires a
\nminimum limit of $10,000 per person and $20,000 per accident.
\nIncreasing this coverage makes good sense for most people,
\nespecially for persons who travel outside of Massachusetts, as
\ncompulsory auto insurance is not mandatory in all states.
\n Please keep in mind that you can purchase Part 3
\ncoverage with limits that are lower than but not higher than
\nthe limits you purchase for Part 5. It is recommended that you
\npurchase this coverage in limits equal to the limits you
\npurchase under Part 5.
\n Part 4: DAMAGE TO SOMEONE ELSE’S PROPERTY pays for
\nproperty damage and for costs resulting from the loss of the
\nuse of property damaged from an accident caused by you, a
\nhousehold member or anyone using your auto with permission.
\nThis Part never covers damage to your automobile or property.
\n The minimum amount required is $5000. However, you
\nshould consider purchasing this insurance with higher limits.
\nToday’s new car and repair prices being what they are, a limit
\nof $25,000 is a good choice for many people. <\/p>\n
OPTIONAL COVERAGES<\/p>\n
There are eight other coverages available to you in
\naddition to the compulsory insurance, and in general it is up
\nto you whether you purchase them or not. These optional
\ncoverages provide additional protection against financial loss
\nresulting from an automobile accident. If you have borrowed
\nmoney to purchase your automobile, your lender may legally
\nrequire you to carry the optional coverages, Collision (Part 7)
\nand Comprehensive (Part 9).
\n. Your insurance company may refuse to issue you some optional
\ncoverages because of certain prior driving violations or
\ninsurance-related crimes. <\/p>\n
Optional Coverages
\n Part 5: OPTIONAL BODILY INJURY TO OTHERS allows you to
\nextend the protection you must purchase under Part 1, by
\noffering coverage above the $10,000\/$20,000 limit for injuries
\ncaused by you in Massachusetts, in other parts of the United
\nStates and in Canada.
\n Unlike the compulsory Bodily Injury insurance, Part 5
\nwill pay for injuries to guests of your automobile and for
\ninjuries to others caused by any person who is using your car
\nwith your consent.
\n To protect your assets and future income, it makes good
\nsense to buy higher limits under this Part; $100,000 per person
\nand $300,000 per accident will meet most drivers needs. Such
\nadditional coverage is valuable since, considering the rising
\ncosts of medical and hospital care, court judgments can easily
\nexceed $20,000. <\/p>\n
Part 6: MEDICAL PAYMENTS covers medical expenses for
\ninjuries resulting from any accident involving you, any
\nhousehold member and any passenger, once the limits provided
\nunder Part 2, Personal Injury Protection have been exhausted.
\nIt does not cover lost wages. Drivers who have comprehensive
\nhealth insurance plans may not need the extra coverage provided
\nunder Part 6.
\n You should, however, think about buying this Part if you
\nand your household members do not already have adequate health
\ninsurance or if you want this protection for passengers in your
\nautomobile.<\/p>\n
Part 7: COLLISION insurance pays for damage to your
\nautomobile caused by a collision regardless of fault. The cost
\nof collision protection varies with the model and year of your
\nautomobile, where it is garaged and the operator
\nclassification. Because it pays for damages regardless of
\nfault, this Part is expensive to purchase.
\n Unfortunately, there is no good rule-of-thumb to use
\nwhen purchasing Collision coverage. If your automobile is
\nfinanced, your lender may require you to carry this Part on
\nyour policy. However, if you own your automobile outright,
\nyour decision to purchase Collision should depend on whether or
\nnot you can afford to replace your automobile without help from
\nyour insurance company.<\/p>\n
A deductible is the portion of each claim you agree not
\nto be covered for. For example, if you purchase Collision with
\nthe standard $500 deductible and you suffer a loss of $700, you
\nwill collect $200 from your insurance company. If a loss of
\nless than $500 occurs, you are responsible for the entire
\namount. Collision protection can be purchased at a much lower
\nprice when you purchase a deductible higher than the standard
\n$500 deductible. Choose the larger deductible if you can
\nafford to pay a larger loss out of your own pocket. You also
\nhave the option to purchase the more expensive $300
\ndeductible. The choice is not an easy one, so take the time to
\nevaluate your financial circumstances when purchasing this and
\nany other available deductible.
\n Your company may require a $500 Collision or Limited
\nCollision deductible if you have had a major at-fault accident
\nwithin the previous three years.
\n WAIVER OF DEDUCTIBLE coverage may be purchased at a
\nhigher premium if you opt to purchase Collision coverage. The
\nWaiver of Deductible allows any deductible you choose to be
\nignored in cases of fault on the part of another identifiable
\ndriver. The deductible would not be waived in a hit-and-run
\naccident, even if the unidentifiable party was completely at
\nfault.
\n You might choose to purchase the Waiver of Deductible
\nfor the benefit it offers if you are involved in an accident
\ncaused by an identifiable, insured driver. While many
\npolicyholders are willing to pay the additional cost for the
\nWaiver of Deductible’s convenience, others view the benefits as
\ntoo few to justify the extra premium.
\n NOTE: Your failure to list a household member as an
\noperator on your policy may have very serious consequences.
\nYour insurer will not pay for a Collision loss for an accident
\nwhich occurs while your auto is being operated by a household
\nmember who is not listed as an operator on your policy.
\nPayment is withheld when the household member, if listed, would
\nrequire the payment of additional premium on your policy
\nbecause the household member would be classified as an
\ninexperienced operator or a higher rating step would be
\nassigned under the Safe Driver Insurance Plan. <\/p>\n
Part 8: LIMITED COLLISION also pays for damages to your
\nautomobile caused by a collision, although in limited
\ncircumstances. Because this coverage is not as broad as Part
\n7, its cost is considerably less.
\n This coverage will not pay for one-car accidents,
\naccidents in which you are more than 50% at fault or for
\naccidents where the owner or driver of the other vehicle cannot <\/p>\n
be identified. Limited Collision will pay for most other
\naccidents and offers the convenience of dealing with your own
\ninsurance company.
\n If you are willing to pay for the damage you might cause
\nto your auto, or if the value of your auto does not justify
\npurchasing full Collision coverage, then Limited Collision or
\nno collision coverage is your best bet.
\n You may reduce or eliminate the $500 standard Limited
\nCollision deductible for an extra premium.
\n NOTE: Your failure to list a household member as an
\noperator on your policy may have very serious consequences.
\nYour insurer will not pay for a Limited Collision loss for an
\naccident which occurs while your auto is being operated by a
\nhousehold member who is not listed as an operator on your
\npolicy. Payment is withheld when the household member, if
\nlisted, would require the payment of additional premium on your
\npolicy because the household member would be classified as an
\ninexperienced operator or a higher rating step would be
\nassigned under the Safe Driver Insurance Plan.<\/p>\n
Part 9: COMPREHENSIVE coverage will pay for losses which
\nare not caused by a collision, such as fire, theft and
\nvandalism losses. In addition, this insurance will pay you up
\nto $15 a day for substitute transportation until your stolen
\nauto is recovered (up to a limit of $450).
\n Comprehensive coverage does not insure personal
\nbelongings in your auto unless they have been made a permanent
\npart of your automobile. This means that clothing is never
\ncovered, but a C.B. radio permanently installed in the opening
\nof the dash or console is.
\n The standard deductible for Comprehensive coverage is
\n$500, although you have the option to purchase a $300
\ndeductible. As with the Collision coverage, buying back to the
\nlower deductible will raise your premium cost. Seriously
\nconsider choosing a larger deductible than the standard one if
\nyou can afford to pay a larger loss out of your own pocket.
\nYou should also consider installing an anti-theft device and\/or
\na signal-activated vehicle recovery system. Anti-theft
\nequipment and recovery system discounts, which are discussed in
\nthe Saving Money Section, range from 5% to 35%.
\n You also have the option of purchasing a $100 deductible
\non glass claims. If you take a deductible, you will reduce the
\ncost of your Comprehensive coverage by %, however if you have
\na claim for a broken windshield or other glass damage, you will
\nhave to pay for the first $100 of that damage. <\/p>\n
Part 10: SUBSTITUTE TRANSPORTATION pays up to $15 a day
\nfor car rental, taxicab fares and other transportation costs
\n(up to a limit of $450).
\n You should carefully consider whether you need this
\ncoverage. Claims for loss of use caused by another driver are
\ngenerally payable under that driver’s Damage To Someone Else’s
\nProperty coverage (Part 4). Comprehensive Coverage (Part 9)
\nprovides reimbursement for loss of use resulting from theft.
\nMoreover, Substitute Transportation coverage does not pay under
\nall conditions. If your auto is being repaired or replaced
\nbecause of damages that would be covered under Collision
\ncoverage (Part 7), you can collect under Part 10. There is no
\ncoverage, however, if your auto is merely in the shop for
\nroutine repairs.
\n Please note that if you are under the legal age or have
\na poor credit rating you may be unable to rent a vehicle.
\nHowever, you do remain eligible for the reimbursement of
\ntransportation expenses. <\/p>\n
Part 11: TOWING AND LABOR will pay up to $25 for towing
\nand labor charges each time your automobile breaks down. The
\ncost of replacement parts is not covered and labor is covered
\nonly to get your auto going again at the place of breakdown.
\n If you belong to a motor club, you may already have
\nTowing and Labor coverage – so check your club’s benefits
\nbefore purchasing Part 11.
\n Your insurance company may legally refuse to sell you
\nTowing and Labor coverage. <\/p>\n
Part 12: BODILY INJURY CAUSED BY AN UNDERINSURED AUTO
\nwill pay damages for bodily injury to people injured or killed
\nas the result of certain accidents caused by someone who does
\nnot have enough insurance, up to the difference between the
\ntotal amount collected from the automobile bodily injury
\nliability insurance covering the owner and the operator of the
\nauto and the limits you purchased for this coverage.
\n Your company will pay damages to or for you, or any
\nhousehold member, unless the household member has his or her
\nown Massachusetts auto policy or is covered by a Massachusetts
\nauto policy of a household member providing similar coverage
\nwith higher limits, if you are injured as a pedestrian or while
\noccupying an auto you do not own. It will also pay damages to
\nor for anyone else occupying your auto unless that person has
\nhis or her own Massachusetts auto policy or is covered by a
\nMassachusetts auto policy of any household member providing
\nsimilar coverage.<\/p>\n
Below are some examples of how this coverage works:
\nEXAMPLE 1 – You do not buy the Underinsured Auto coverage. You
\nare injured in an auto accident caused by the other driver who
\nis legally responsible for your injuries. Your damages total
\n$20,000. The other driver’s Bodily Injury liability limit is
\n$10,000. You can collect $10,000 from the other driver’s
\ninsurance, but you must sue the other driver to collect the
\nother $10,000. If the other driver has no assets, you could
\nsuffer a loss of $10,000.<\/p>\n
EXAMPLE 2 – You purchase Underinsured Auto coverage limits of
\n$20,000 per person; $40,000 per accident. Your damages are
\n$30,000. The other driver’s policy provides $10,000 of Bodily
\nInjury liability insurance, which you collect from his
\ncompany. You can only collect an additional $10,000 from your
\ncompany. This is the difference between the amount collected
\nfrom all automobile Bodily Injury liability limits and your
\nUnderinsured Auto limit of $20,000 for each person. <\/p>\n
EXAMPLE 3 – You purchase Underinsured Auto coverage limits of
\n$20,000 per person; $40,000 per accident. Your damages are
\n$20,000. The other driver’s policy provides $10,000 of Bodily
\nInjury liability insurance which you collect from his company.
\nYour Underinsured Auto coverage will pay you $10,000 in full
\npayment of your outstanding damages. This is the difference
\nbetween the other driver’s Bodily Injury limits and your
\nUnderinsured Auto coverage limits. <\/p>\n
Keep in mind that since all registered motor vehicles
\nmust have the compulsory Bodily Injury limits of $10,000 per
\nperson; $20,000 per accident, purchasing Underinsured Auto
\ncoverage limits of $10,000\/$20,000 provides little or no
\ncoverage. If you choose to purchase Underinsurance coverage,
\nyou may buy limits that are less than but not higher than the
\nlimits purchased under Part 5, however it is recommended that
\nyou buy it in limits equal to the limits you purchase under
\nPart 5. <\/p>\n
SAVING MONEY<\/p>\n
Getting the discounts you are entitled to, paying
\nattention to detail and driving conscientiously can all work to
\nkeep your insurance costs down. By following the suggestions
\nlisted below, you will maximize the available savings. <\/p>\n
Be An Alert Shopper
\n Before choosing your coverages, limits and deductibles,
\nread the Massachusetts Automobile Insurance Policy carefully to
\nbe certain that you understand the coverages. Assess your
\ndriving habits in order to determine the coverages and limits
\nyou need. When filling out the application, make sure that you
\ncomplete it accurately in order for your policy to be rated
\nproperly. Finally, when you receive your Coverage Selections
\nPage, do not file it away without checking to see that the
\ncoverages, limits, deductibles, discounts and premium are
\ncorrect. <\/p>\n
Review Your Bill
\n You do not leave the store without a receipt – and you
\nshould not buy auto insurance without an itemized bill!
\n First, look at your bill to find out whether any part of
\nthe total cost is for service fees. Although some agents and
\nbrokers charge nothing for the additional effort needed to fill
\nout various forms or to bring your license plates from the
\nRegistry, others will charge you a fee for performing such
\nservices. However, no agent or broker can charge service fees
\nin connection with issuing or renewing your automobile
\ninsurance policy, nor are you legally bound to pay for any
\nother services your agent or broker performs without your
\nconsent.
\n Your itemized bill should tell you whether you have been
\nenrolled in a motor club. Obviously, if you do not want to
\njoin a motor club or if you are already a member of a different
\nmotor club, you should not pay the membership dues. If you do
\nbelong to a motor club, check to see if membership includes
\nbenefits similar to the Towing\/Labor and Substitute
\nTransportation coverages – there is no point in buying
\nduplicate coverage.
\n Of course, the main thing your insurance bill will tell
\nyou is how much you owe. According to state law, no company,
\nagent or broker can ask you to pay more than 30% of your
\npremium before you renew your coverage (although you may pay
\nmore than 30% if you wish). However, if you have defaulted on
\na premium payment during the previous twenty-four months, your
\ninsurer can legally require payment of 100% of your premium. <\/p>\n
Should you choose to pay less than your total bill, it
\nis likely that you will have to pay some kind of finance
\ncharge. Choose your finance plan carefully. Commercial
\nlenders and insurance premium finance agencies charge up to 18%
\ninterest per year on the unpaid balance. Insurance premium
\nfinance agencies may also charge an additional $16 fee for
\nsetting up the account.
\n For many policyholders, another way of making time
\npayments is to do business with an insurance company that will
\nbill you in installments and charge a flat fee for each
\nbilling. These charges vary from company to company and
\naccording to the number of installments you want to make. In
\nsome instances the company’s carrying charges will cost less
\nthan other financing arrangements. <\/p>\n
Discount Opportunities
\n Be particularly careful to answer those application
\nquestions relating to the following five discounts, which can
\ncut your insurance costs considerably if you qualify for them.
\n * Low Mileage Discount – If you drive 5,000 or fewer
\nmiles per year, you are eligible for the maximum 10% discount.
\nIf you drive between 5,001 and 7,500 miles per year, you are
\neligible for a 5% discount. The discount applies to all
\ncoverages except Comprehensive, Substitute Transportation and
\nTowing and Labor, and applies to the rate for each insured car
\nas otherwise determined by territory, driver class, vehicle
\nmodel year and symbol, prior to the application of SDIP
\nsurcharges or credits.
\n * Senior Citizen Discount – Drivers 65 years or older
\nwho are principal operators of their cars receive a 25%
\nreduction on all their auto coverages, provided there is no
\ninexperienced driver (one with less than six years of driving
\nexperience) listed on their policies. Cars used for business
\nare not eligible. The 25% discount does not apply to SDIP
\nSurcharge Points.
\n * Public Transportation Discount – Choosing to take
\npublic transportation instead of using your automobile can save
\nyou 10% on your property damage liability and collision
\ncoverages. The maximum discount is $75. To obtain this
\ndiscount, you must show evidence of purchase of 11 months of
\ncommuter passes or tickets from a qualified transit system.
\n * Anti-Theft and Recovery System Discounts-
\nPolicyholders who install certain kinds of anti-theft devices
\nare eligible for a 5%, 15%, or 20% discount on Comprehensive
\ncoverages. The installation of a signal-activated vehicle
\nrecovery system, in combination with an approved anti-theft
\ndevice, can qualify you for a savings between 25%-35%. The
\nsize of the discount varies, depending on the kind of
\nanti-theft device, and whether it is combined with a vehicle
\nrecovery system. <\/p>\n
You should seriously consider buying and using some kind
\nof anti-theft device and\/or vehicle recovery system. Before
\nyou choose a particular brand or model, check with your agent,
\nbroker or company representative about the discount. A quick
\ncheck before you buy can help you avoid an expensive
\nmisunderstanding later.
\n * Multi-Vehicle Discount – Individuals and married
\ncouples who own more than one car and insure them for Collision
\nor Limited Collision coverage with the same company can get a
\n5% discount on these coverages. This discount is available
\nonly to experienced drivers. <\/p>\n
Inexperienced drivers can realize a 10% savings on three
\nof the four compulsory coverages and on optional liability and
\ncollision coverages, if they complete an approved
\ndriver-training course. The savings is calculated into the
\nrates for the particular driver classifications.
\n Finally, you can affect the cost of your policy by how
\nyou and the other operators of your auto drive. You will
\nreceive Credit Points on your policy if you and the other
\noperators maintain good driving records. More detailed
\ninformation about the Safe Driver Insurance Plan can be found
\nin Part 4 of this guide. <\/p>\n
THE 1990 SAFE DRIVER INSURANCE PLAN<\/p>\n
If you and the other drivers listed on your policy have
\nincident-free driving history records, then your insurance
\npremium for Bodily Injury to Others (Part l), Personal Injury
\nProtection (Part 2), Damage to Someone Else’s Property (Part 4)
\nand Collision (Part 7) coverages will be reduced by the
\napplication of Credit Points, helping to lower your total
\nautomobile insurance bill. If you or any other driver listed
\non your policy caused an accident or violated any surchargeable
\nmotor vehicle traffic law, your insurance premium for Parts 1,
\n2, 4, and 7 will increase due to the application of Surcharge
\nPoints.
\n The 1990 Safe Driver Insurance Plan 211 CMR 125.00 is
\npublished in accordance with the authority granted to the
\nCommissioner of Insurance under Massachusetts General Laws
\nChapter 175 Section 113B.<\/p>\n
HIGHLIGHTS OF THE 1990 SAFE DRIVER INSURANCE PLAN
\n * All operators on a policy will be assigned an SDIP
\n Step.
\n * Six years of driving history will be used to rate your
\n policy.
\n * An SDIP Step is determined by adding Surcharge Points
\n for surchargeable incidents within the policy Experience
\n Period to a starting step value of 15 and subtracting
\n Credit Points for each year of incident-free driving
\n within the policy Experience Period for which the
\n operator was licensed to drive in Massachusetts.
\n * Operators will receive one Credit Point for each year
\n of incident-free driving for which they were licensed to
\n drive in Massachusetts.
\n * Surcharge Points for Surchargeable Incidents have
\n increased.
\n * Aging of incidents has been eliminated.<\/p>\n
SAFE DRIVER INSURANCE PLAN (SDIP) STEPS
\n The 1990 Safe Driver Insurance Plan assigns an SDIP Step
\nto each operator listed on a policy. For policy year 1990 the
\nSDIP Step range is from 09 to 35. SDIP Step 09 is the Best
\nCredit Step for 1990.
\n All operators enter the step system at Step 15, the
\nneutral step – no increase or decrease in automobile insurance
\npremium. Each operator’s SDIP Step is computed by adding to
\nthe starting step value of 15, Surcharge Points for
\nsurchargeable incidents within the policy Experience Period,
\nand then subtracting Credit Points earned by the operator for
\neach incident-free year within the policy Experience Period or
\nspecial Credit Points for the Clean Slate Rule.<\/p>\n
This equation will help you determine your operator SDIP
\nStep:
\n STARTING STEP 15
\n + SURCHARGE POINTS
\n – CREDIT POINTS
\n ———————-
\n = OPERATOR’S SDIP STEP<\/p>\n
EXPERIENCE PERIOD
\n The Experience Period of a 1990 policy is the 6 year
\nperiod immediately preceding the policy effective date. The
\nExperience Period is expected to increase each year by 1 year
\nup to 15 years. For example, the Experience Period of a policy
\nin 1991 is expected to be 7 years.<\/p>\n
CREDIT POINTS
\n One Credit Point is subtracted from the starting step of
\n15 for each incident-free year of driving during the policy
\nExperience Period. An incident free year of driving is any of
\nthe 1-year periods immediately preceding the policy effective
\ndate for which the operator has been licensed to drive in
\nMassachusetts and during which the operator has not had a
\nsurchargeable at-fault accident or motor vehicle traffic
\nviolation.
\n EXAMPLE: If you have been licensed to drive in
\nMassachusetts for 10 years, there are no surchargeable
\nincidents on your driving history record and your policy
\neffective date is 01\/01\/90, you will be placed at SDIP Step 09,
\nthe Best Credit, for 1990. To compute this yourself, first
\ndetermine either the date you obtained your Massachusetts
\ndriver’s license or the beginning date of your policy
\nExperience Period (preceding 6 years), whichever is later. In
\nthis example, 01\/01\/84, the beginning date of the policy
\nExperience Period, is later. Next, subtract 6 Credit Points –
\n1 point for each incident-free year within the Experience
\nPeriod – from the neutral step 15. The resulting number is
\nyour operator SDIP Step.<\/p>\n
STARTING STEP 01\/01\/84 15
\n CREDIT POINTS – 06
\n —–
\n OPERATOR SDIP STEP = 09<\/p>\n
Operators with less than 6 years of driving experience
\nwill receive Credit Points for only those incident-free years
\nfor which they were licensed to drive in Massachusetts.
\n Operators licensed to drive in Massachusetts for less
\nthan 1 year will be placed at SDIP Step 15, the neutral step.<\/p>\n
SURCHARGEABLE INCIDENTS AND SURCHARGE POINTS
\n At-Fault Accidents – If you are involved in an accident
\nand you file a Collision claim, or if another person <\/p>\n
files a claim under Damage To Someone Else’s Property, your
\ninsurance company must determine who was more than 50%
\nat-fault. It makes no difference whether the at-fault accident
\noccurred within the Commonwealth or out-of-state.
\n There are two types of at-fault accidents. A Minor
\nAt-Fault Accident is a claim payment under Damage to Someone
\nElse’s Property, Collision or Limited Collision coverage of
\nmore than $200 but not more than $1,500 and a Major At-Fault
\nAccident is a claim payment under Damage to Someone Else’s
\nProperty, Collision or Limited Collision coverage of more than
\n$1,500.
\n If your company finds that you were at-fault and pays a
\nclaim of more than $200, the at-fault accident will be added to
\nyour operator’s driving history record and your company will
\nsend you a Surcharge Notice. The Surcharge Date for an
\nat-fault accident is the Date of Notice entered by your insurer
\non the Surcharge Notice form. The accident will become part of
\nyour driving history record unless the company withdraws the
\nSurcharge Notice or you successfully appeal the notice to the
\nBoard of Appeal. <\/p>\n
Appealing At-Fault Accidents- Accident surcharges must
\nbe appealed at the time you receive the Surcharge Notice from
\nyour insurance company. Detailed instructions for filing an
\nappeal are on the Surcharge Notice. The Board of Appeal on
\nMotor Vehicle Liability Policies and Bonds will hold the
\nhearing and will notify you, your company and the Merit Rating
\nBoard of its decision. If the Board determines that you were
\nnot more than 50% at-fault in the accident, the Merit Rating
\nBoard will remove the incident from your driving history record.
\n If your premium is increased due to Surcharge Points for
\nan at-fault accident while your appeal is pending, you must pay
\nthe additional premium or your policy will be cancelled. Your
\npolicy will be re-rated by your insurance company if you win
\nyour appeal.
\n If you have any questions concerning an appeal of a
\nSurcharge Notice, contact the Board of Appeal at (617)
\n727-7189, extension #223.<\/p>\n
Motor Vehicle Traffic Law Violations – If you are
\nconvicted of, or make payments for, violating certain motor
\nvehicle traffic laws, or are assigned to an alcohol education
\nprogram, the court will notify the Merit Rating Board. The
\nmotor vehicle traffic law violation will be added to your
\ndriving history record. The court judgment date is the
\nSurcharge Date for a motor vehicle traffic law violation.
\n Surcharge Points are not assigned to a non-criminal
\nminor motor vehicle traffic law violation if it is the first
\nmotor vehicle traffic law violation in the operator’s policy <\/p>\n
Experience Period. No Surcharge Points are assessed for the
\nincident but no Credit Points are calculated for the year in
\nwhich the surcharge date is recorded, since the operator does
\nnot have an incident-free year.
\n A list of all surchargeable Motor Vehicle Traffic Law
\nViolations can be obtained from the Merit Rating Board.<\/p>\n
Out of-State Violations – Convictions of Motor Vehicle
\nTraffic Laws outside the Commonwealth that are reported to the
\nRegistry of Motor Vehicles will be added to the operator’s
\ndriving history record and will be subject to Surcharge Points.<\/p>\n
Surcharge Points – The number of Surcharge Points
\nassigned to each surchargeable incident is determined by the
\ntype of incident:<\/p>\n
Minor Traffic Law Violation 2 Surcharge Points
\n Minor At-Fault Accident 3 Surcharge Points
\n Major At-Fault Accident 4 Surcharge Points
\n Major Traffic Law Violation 5 Surcharge Points<\/p>\n
EXAMPLE: If you have been licensed to drive in
\nMassachusetts for 8 years; you have 2 Minor Traffic Law
\nViolations and 1 Minor At-Fault Accident on your driving
\nhistory record and your policy effective date is 01\/01\/90, then
\nyour SDIP Step will be 17. <\/p>\n
STARTING STEP 01\/01\/84 15
\n Incident Date Surcharge Date
\nSPEEDING 12\/01\/84 12\/22\/84 00
\nMINOR AT-FAULT ACCIDENT 07\/17\/87 08\/18\/87 03
\nSPEEDING 04\/24\/88 05\/02\/88 02
\nCREDIT POINTS (incident-free years 1985, 1986 and 1989) – 03
\n —-
\nOPERATOR SDIP STEP = 17<\/p>\n
COMPREHENSIVE CLAIMS
\n Your insurance company is required to notify the Merit
\nRating Board when a Comprehensive claim has been paid.
\nComprehensive claims are added to the policyholder’s driving
\nhistory record. In future years the Comprehensive coverage on
\nyour private passenger automobile insurance policy may be
\nsubject to Surcharge Points if you submit four or more
\nComprehensive claims on or after January 1, 1984, totaling
\n$2,000 or more.
\n Surcharge Points for Comprehensive claims will not be
\napplied for policies effective in 1990.<\/p>\n
ASSIGNMENT OF OPERATOR SDIP STEPS TO VEHICLES LISTED ON A POLICY
\n After each operator listed on your policy is assigned an
\nSDIP Step, the operators are assigned to the vehicles listed on
\nthe policy. The listed operator with the highest Step is
\nassigned to the vehicle with the highest combined premium for
\nParts 1, 2, 4, and 7. For each subsequent vehicle, the listed
\noperator with the next highest Step is assigned to the vehicle
\nwith the next highest combined premium until all the vehicles
\nhave been exhausted. An operator’s SDIP Step greater than SDIP
\nStep 15 can not be billed on more than one policy in effect at
\nthe same time.
\n When there are more vehicles than operators listed on a
\npolicy, the excess vehicles are assigned the step of the
\noperator with the lowest Step unless such operator’s Step is
\nabove SDIP Step 15. In such case, the excess vehicles are
\nassigned SDIP Step 15. <\/p>\n
EXAMPLE: A policy lists four (4) vehicles and three (3)
\noperators: Operator A’s SDIP Step is 20, Operator B’s SDIP
\nStep is 15 and Operator C’s SDIP Step is 09.<\/p>\n
Vehicles Operators
\n 1 A. SDIP Step 20
\n 2 B. SDIP Step 15
\n 3 C. SDIP Step 09
\n 4 C. SDIP Step 09<\/p>\n
APPLICATION OF PREMIUM ADJUSTMENTS TO COVERAGES
\n An operator’s SDIP Step determines how much of an
\nadjustment will be made to the policy premium. SDIP Steps 09
\n(Best Credit) to 14 are Credit Steps. For each step below 15
\nthe operator’s premium will be adjusted downwards. Step 15 is
\nthe neutral step, which means the operator is neither in credit
\nnor surcharge status, and will not receive a reduction or an
\nincrease in premium. Step 16 through 35 are Surcharge Steps.
\nFor each step above 15 the operator’s premium will be adjusted
\nupwards. If you wish to calculate the actual amount of your
\ncredit or surcharge, refer to “Calculation of SDIP Credits and
\nSurcharges” at the end of this section.<\/p>\n
Liability Premium- Each step represents a 7% change in
\nthe following liability coverages:
\n Part l: Bodily Injury to Others
\n Part 2: Personal Injury Protection
\n Part 4: Damage to Someone Else’s Property (PDL)<\/p>\n
Collision Premium- Each step represents a 5% change in
\nCollision Coverage:
\n Part 7: Collision<\/p>\n
Example: If you have been licensed to drive in
\nMassachusetts for six years; you have no incidents on your
\n6-year driving history record; your SDIP Step is 09; and you
\nhave Liability and Collision coverages on your policy, then you
\nwill receive a 42% (7% X 6 steps) reduction on your Liability
\ncoverages and a 30% (5% X 6 steps) reduction on your Collision
\ncoverage.<\/p>\n
CLEAN SLATE RULES
\n The Safe Driver Insurance Plan provides incentives to
\noperator’s who have incidents on their record in the early
\nyears of the Experience Period, but in subsequent years have
\nmaintained clean driving history records.<\/p>\n
Transitional Clean Slate Rule- In order to ensure a fair
\nand equitable transition from the 1989 Safe Driver Insurance
\nPlan, the 1990 Safe Driver Insurance Plan includes a Clean
\nSlate Rule. For 1990, a 3-Year Clean Slate Rule will place an
\noperator in a credit step if that operator would have been in
\ncredit status under the 1989 SDIP.
\n If the operator’s SDIP Step is greater than 15, the
\noperator’s SDIP Step will be set at 14 if all of the following
\nconditions for the Clean Slate Rule are met:<\/p>\n
Three (3) Year Clean Slate Rule applies to an operator on a
\n1990 policy if:
\na. the operator has a three year period of incident free
\n driving within the policy Experience Period;
\nb. the three year period occurs after 1\/1\/87 and before
\n 12\/31\/90;
\nc. the operator had a valid Massachusetts driver license
\n for the entire three year incident-free period; and
\nd. the operator’s SDIP step at the end of the incident-free
\n period would be greater than 14. Then the operator’s
\n SDIP step is set to 14.
\nPoints for surchargeable incidents within the policy Experience
\nPeriod which have surcharge dates that are recorded after this
\n3-year incident free period are added to operator SDIP Step 14. <\/p>\n
Clean Slate Incentive- As an incentive to promote safe
\ndriving, a Five (5) Year Clean Slate provision has been added
\nfor policies effective after 1991. If an operator maintains
\nfive consecutive years of incident-free driving within the
\npolicy Experience Period, and the operator’s SDIP Step is
\ngreater than 15, then the operator’s SDIP Step will be set at
\n15. The operator must have a valid Massachusetts driver’s
\nlicense for the entire five year incident free period.
\nSAFE DRIVER INSURANCE PLAN (SDIP) STATEMENT
\n Your insurance company is required to send you a Safe
\nDriver Insurance Plan (SDIP) Statement if you or any operator
\nlisted on your policy are not assigned Operator Step 09, the
\nBest Credit for 1990.<\/p>\n
REFUSAL TO PAY A PREMIUM INCREASE
\n If you refuse to pay your premium increase due to
\nSurcharge Points, your insurance company will cancel your
\npolicy after sending you the Notice of Cancellation required by
\nlaw.<\/p>\n
RECORD ERROR OR BILLING PROBLEMS
\n If you believe a billing is erroneous, you should first
\ncontact your insurance agent, broker or company. Make sure you
\nhave all necessary information on hand, including your Coverage
\nSelections Page, Safe Driver Insurance Plan (SDIP) Statement
\nand copies of your billings.
\n If you question the accuracy of your driving history
\nrecord as shown on your Safe Driver Insurance Plan (SDIP)
\nStatement call or write the Merit Rating Board’s Insurance
\nCompany Services Section, 100 Nashua Street, 6th Floor, Boston,
\nMA 02114, (617) 727-7017. You must pay a billed premium while
\nthe matter is under investigation or your insurance company
\nwill cancel your policy. If an error is discovered, it will be
\ncorrected and all parties will be notified in writing. If you
\nwere erroneously billed your insurance company will re-rate
\nyour policy.<\/p>\n
OBTAINING A COPY OF YOUR OPERATOR DRIVING HISTORY RECORD
\n You may obtain a copy of your operator driving history
\nrecord from the Merit Rating Board. This detailed record will
\nshow six years of your active surchargeable incidents on file
\nat the Merit Rating Board. The cost is $3.00. DO NOT MAIL
\nCASH. Make check or money order payable to the Commonwealth of
\nMassachusetts.
\n No fee is required to inspect your computer record at
\nthe Merit Rating Board’s office. However, a prior appointment
\nmust be made with the Board’s Insurance Company Service Section.
\nCALCULATION OF SDIP CREDITS AND SURCHARGES
\n Your total policy credit or surcharge is determined by
\nmultiplying the coverage premium shown on your Coverage
\nSelections Page by the factor which corresponds to your SDIP
\nStep (see below), and then adding the products for all four
\ncoverages. Subtract this number from your total premium if you
\nare determining a credit. Add this number to your total premium
\nif you are determining a surcharge.
\n================================================================
\n SURCHARGE FACTORS
\n Step Part 1 Part 2 Part 4 Part 7
\n Number BI to Others PIP Property Collision
\n Damage
\n—— ——— ——- ——– ——-<\/p>\n
35 1.40 1.40 1.40 1.00
\n 34 1.33 1.33 1.33 0.95
\n 33 1.26 1.26 1.26 0.90
\n 32 1.19 1.19 1.19 0.85
\n 31 1.12 1.12 1.12 0.85
\n 30 1.05 1.05 1.05 0.75
\n 29 0.98 0.98 0.98 0.70
\n 28 0.91 0.91 0.91 0.65
\n 27 0.84 0.84 0.84 0.60
\n 26 0.77 0.77 0.77 0.55
\n 25 0.70 0.70 0.70 0.50
\n 24 0.63 0.63 0.63 0.45
\n 23 0.56 0.56 0.56 0.40
\n 22 0.49 0.49 0.49 0.35
\n 21 0.42 0.42 0.42 0.30
\n 20 0.35 0.35 0.35 0.25
\n 19 0.28 0.28 0.28 0.20
\n 18 0.21 0.21 0.21 0.15
\n 17 0.14 0.14 0.14 0.10
\n 16 0.07 0.07 0.07 0.05
\n=================================================================
\n NO CREDIT\/NO SURCHARGE FACTORS
\nStep
\nNumber Part 1 Part 2 Part 4 Part 7
\n—— ——- —— —— ——
\n 15 0.000 0.000 0.000 0.000
\n=================================================================
\n SURCHARGE FACTORS
\nStep
\nNumber Part 1 Part 2 Part 4 Part 7
\n—— ——— ——- —— ——
\n 14 0.07 0.07 0.07 0.05
\n 13 0.14 0.14 0.14 0.10
\n 12 0.21 0.21 0.21 0.15
\n 11 0.28 0.28 0.28 0.20
\nBEST 10 0.35 0.35 0.35 0.25
\nCREDIT= 09 0.42 0.42 0.42 0.30
\n================================================================<\/p>\n
The Division would like to thank the Merit Rating Board for its
\npreparation of this section of the guide.<\/p>\n
FILING A COMPLAINT<\/p>\n
If you believe that your insurance company has acted
\nimproperly in issuing, renewing or cancelling your automobile
\ninsurance policy, or has refused to pay all or part of a fair
\nclaim, or your agent, broker or company has misrepresented you,
\nyou have the right to file a complaint and seek a resolution.
\n The problem may be due to a simple error, and may be
\ncorrected with an inquiry over the telephone. Contact your
\nagent, broker or company representative. Make sure you have all
\nnecessary information on hand, such as the policy or account
\nnumber, a clear and concise description of the problem and any
\nother important information.
\n If you do not receive a prompt, satisfactory response,
\nwrite a letter to the company briefly explaining your problem and
\nwhat you expect to be done to correct it. It may be a good idea
\nto send the letter by registered mail to guarantee that the
\ncompany receives it.
\n If you still feel you have been treated unfairly, send a
\ncomplaint letter to the Division of Insurance, and we will assist
\nyou in resolving your problem. Be sure to include your name,
\naddress, and phone number; the name of the agent, broker or
\ninsurance company; the policy number; and a brief description of
\nthe problem. Make sure you keep a copy of the letter and any
\nother documents you include with the letter, for your own
\nrecords. Keep all letters, receipts, bills and policies together
\nfor easy reference. The Division of Insurance has Consumer
\nService offices located at:<\/p>\n
280 Friend Street 436 Dwight Street, Rm. 438
\n Boston, MA 02114 Springfield, MA 01103
\n (617) 727-3333 (413) 784-1190<\/p>\n
We will make every effort to ensure that your valid
\ncomplaint is resolved in a satisfactory manner, by investigating
\nthe problem, clarifying misunderstandings and making sure you get
\nclear responses to your questions. We cannot however, guarantee
\na favorable action on your complaint if it is not supported by
\nfacts or the law, nor can we provide legal services that may be
\nrequired to settle a more complicated complaint. <\/p>\n
