Massachusetts Compulsory Auto Insurance

Massachusetts law requires all registered vehicles to carry compulsory auto insurance. The state uses a unique no-fault system with mandatory Personal Injury Protection (PIP) coverage.

Compulsory Coverage Requirements

Required Coverage Parts

Massachusetts requires FIVE compulsory coverages:

Exam Tip: Massachusetts requires FIVE compulsory auto coverages, including mandatory PIP and uninsured motorist coverage. Know the minimum limits for each part.

Part 1: Bodily Injury to Others (Liability)

Coverage Provided

Bodily Injury Liability pays when you are legally responsible for:

• Medical expenses of injured persons
• Lost wages and income
• Pain and suffering
• Death benefits
• Legal defense costs

Minimum Limits: 20/40

• $20,000 per person - Maximum for one person's injuries
• $40,000 per accident - Maximum for all injuries in one accident

When Coverage Applies

Coverage applies when:

• You cause an accident
• You are legally liable (at fault)
• Injured party sustains damages exceeding PIP threshold
• Massachusetts or other state recognizes the claim

Exclusions

Part 1 does NOT cover:

• Intentional injuries
• Your own injuries (covered by PIP)
• Injuries to family members living with you
• Business use (without endorsement)
• Racing or criminal activity

Exam Tip: The 20/40 split limit means $20,000 per person and $40,000 total per accident. If three people are injured $20,000 each, the policy only pays $40,000 total.

Part 2: Personal Injury Protection (PIP)

What PIP Covers

Personal Injury Protection is Massachusetts' no-fault coverage providing $8,000 per person for:

Medical Expenses:

• Doctor and hospital bills
• Prescription medications
• Physical therapy
• Prosthetic devices
• Reasonable and necessary treatment

Lost Wages:

• 75% of lost earnings (if unable to work)
• Up to $8,000 combined with medical expenses

Replacement Services:

• Cost of services you cannot perform (housekeeping, childcare)
• Up to $8,000 combined with other PIP benefits

Funeral Expenses:

• Up to $2,000 for funeral and burial costs

No-Fault System

How No-Fault Works:

1. Immediate Coverage: Your PIP pays your medical expenses regardless of fault
2. No Waiting: Benefits paid promptly without determining fault
3. First Priority: PIP pays before health insurance
4. Limit on Lawsuits: Cannot sue for pain and suffering unless serious injury

PIP Coordination with Health Insurance

If you have health insurance:

• Can opt out of medical expenses portion of PIP ($8,000 deductible option)
• Still receive lost wage and replacement services coverage
• May reduce premium by selecting PIP deductible

PIP Deductible Options:

• $0 deductible (full PIP coverage) - Standard
• $8,000 deductible (exclude medical expenses) - Reduces premium
• Still covers lost wages and replacement services

Exam Tip: Massachusetts PIP provides $8,000 per person regardless of fault. You can select an $8,000 deductible if you have health insurance, but still receive lost wage coverage.

Part 3: Uninsured Motorist Coverage

Coverage Provided

Uninsured Motorist (UM) coverage pays when you are injured by:

• Uninsured driver (no insurance)
• Hit-and-run driver (unknown driver)
• Driver with insolvent insurer
• Driver with limits below Massachusetts minimums (underinsured)

Required Limits

Minimum UM limits match bodily injury liability:

• $20,000 per person
• $40,000 per accident

Can purchase higher limits for additional protection.

How UM Works

Claim Process:

1. You are injured by uninsured/underinsured driver
2. PIP pays first $8,000 of medical expenses
3. UM coverage pays additional damages beyond PIP
4. UM covers pain and suffering, lost wages, permanent injury

Example:

• You're injured by uninsured driver
• Medical bills: $50,000
• Lost wages: $15,000
• Pain and suffering: $25,000
• Total damages: $90,000

Payment:

• Your PIP: $8,000 (medical expenses)
• Your UM (20/40 minimum): $20,000
• You're responsible for remaining $62,000 (unless higher UM limits purchased)

Exam Tip: Uninsured motorist coverage is MANDATORY in Massachusetts at 20/40 limits. UM pays after PIP is exhausted and covers damages caused by uninsured drivers.

Part 4: Damage to Someone Else's Property

Coverage Provided

Property Damage Liability pays for damage you cause to:

• Other vehicles
• Buildings and structures
• Fences and mailboxes
• Personal property in other vehicles
• Legal defense costs

Minimum Limit: $5,000

Massachusetts requires minimum $5,000 per accident property damage coverage.

Coverage Notes:

• Pays for others' property only (not your vehicle)
• No deductible applies
• Defense costs included
• Insufficient for most accidents (higher limits recommended)

Recommended Limits

Most Massachusetts drivers carry higher limits:

• $25,000 - Minimum recommended
• $50,000 - Better protection
• $100,000+ - Comprehensive protection

Why Higher Limits?

• Average vehicle cost exceeds $5,000 minimum
• Multiple vehicles damaged in accidents
• Property damage can include buildings, signs, etc.
• Personal asset protection

Part 5: Optional Bodily Injury to Others

Part 5 provides higher liability limits than Part 1 minimums:

Common Limit Options

First Number: Per person limit Second Number: Per accident total limit

Why Purchase Part 5?

• Massachusetts minimum 20/40 is insufficient for serious accidents
• Protects personal assets from lawsuits
• Covers gaps when serious injuries exceed Part 1 limits
• Required by many lenders for financed vehicles

Exam Tip: Part 5 is OPTIONAL but highly recommended. It provides higher bodily injury liability limits beyond the compulsory 20/40 minimums.