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"Buying Your Massachusetts Automobile Insurance" has been
prepared for you by the Massachusetts Division of Insurance as
part of our continuing effort to inform consumers on the
detailed and sometimes complex aspects of purchasing automobile
insurance in the Commonwealth. This guide outlines the basic
automobile coverages you are required by law to purchase, as
well as the coverages available to you on an optional basis.
We have also included a description of the newly amended Safe
Driver Insurance Plan - the Commonwealth's merit rating plan
which offers premium credits to policyholders who practice safe
driving habits. Furthermore, this guide provides information
on filing complaints and money-saving tips for reducing your
premium without sacrificing insurance protection.
If you receive this pamphlet after you purchase your 1990
automobile insurance and you wish to make changes in the
coverage, limits, deductibles or discounts, contact your agent
or company. They can assist you. If you are not satsified
call us. Our Consumer Service Section can be contacted at
(617) 727-7189, X 300.
As you know, the Automobile Insurance Reform Act of 1988
succeeded in updating our no-fault system, lowered the costs of
repairing damaged vehicles, expanded consumers' choices and
initiated long-term, cost-saving efforts that will benefit
consumers into the 1990s.
The 1988 Reform Law addressed the rising costs in the system
through both tort law changes, such as the increase in the tort
threshold from $500 to $2000, and coverage changes, including
the increase in Personal Injury Protection (PIP) from $2,000 to
$8,000, and the coordination of benefits between health
insurance and PIP coverage. Consumers have realized reduced
premiums from additional coverage changes and newly available
discounts. The Reform Law increased the standard deductible
from $300 to $500 for both collision and comprehensive
coverages and created an optional $100 glass deductible. Also,
additional rated reductions are now available for consumers
whose vehicles are equipped with both an anti-theft device and
an auto recovery system, and for cars equipped with air bags or
passive restraint devices.
A new Safe Driver Insurance Plan will mean substantially
reduced premiums for long time good drivers.
This year, a new Safe Driver Insurance Plan takes effect. The
aim of the Plan is to make the Massachusetts merit rating
system more fair by ending the subsidization of unsafe drivers
by good drivers. The Plan, known as a "bonus malus" system,
can be compared to a ladder. The bottom of the ladder
represents the lowest premiums and the top of the ladder
represents the highest premiums. Drivers will be assigned
credits and surcharges that are a percentage of the premium for
specific coverages. Each year, drivers with an incident-free
record move down one step on the ladder and earn a premium
credit. Drivers who have at-fault accidents or certain traffic
violations move up the ladder a number of steps equal to the
number of unsafe driver points assigned and will be assessed a
surcharge for each point. Each step up or down the ladder is
equal to 7% of the driver's premium for liability coverage
(bodily injury, PIP, and property damage liability) and 5% of
the premium for collision coverage.
BUYING YOUR MASSACHUSETTS
AUTOMOBILE INSURANCE
1990
MICHAEL S. DUKAKIS
Governor of Massachusetts
TIMOTHY H. GAILEY
Commissioner of Insurance
Commonwealth of Massachusetts
Division of Insurance
CONTENTS
1. COMPULSORY COVERAGES
Part 1: Bodily Injury to Others..................
Part 2: Personal Injury Protection...............
Part 3: Bodily Injury Caused by an
Uninsured Auto...........................
Part 4: Damage to Someone Else's Property........
2. OPTIONAL COVERAGES
Part 5: Optional Bodily Injury to Others.........
Part 6: Medical Payments.........................
Part 7: Collision................................
Part 8: Limited Collision........................
Part 9: Comprehensive............................
Part 10: Substitute Transportation................
Part 11: Towing and Labor.........................
Part 12: Bodily Injury Caused by an
Underinsured Auto........................
3. SAVING MONEY...........................................
4. 1990 SAFE DRIVER INSURANCE PLAN........................
5. FILING A COMPLAINT.....................................
FROM THE COMMISSIONER
"Buying Your Massachusetts Automobile Insurance" has
been prepared for you by the Massachusetts Division of
Insurance. This guide contains a description of the basic
coverages you are required by law to purchase, as well as the
coverages available to you on an optional basis. We have also
included information on filing complaints and money-saving tips
for reducing your premium without sacrificing insurance
protection.
Many motorists pay a higher premium than they should
because they choose coverages that do not suit their needs.
The most common and costly mistake consumers make when buying
automobile insurance is to renew their policy without assessing
how their individual insurance needs might have changed.
Instead, before you renew your policy, reevaluate your
insurance choices and your eligibility for the many discount
opportunities. Also, buy only the coverage you need and select
deductibles you can afford.
The Safe Driver Insurance Plan (SDIP), which offers
premium credits to motorists who practice safe driving habits,
has been significantly changed for 1990. Although automobile
insurance will always be expensive in an urban, densely
populated state like Massachusetts, you can reduce the cost of
your premium an average of $140 by driving safely and
maintaining an incident-free driving record. Although the Plan
is complex, I urge you to read Part 4 of this guide carefully
for information on the Plan's many new improvements.
Please keep in mind that this guide is not meant to be a
substitute for the Massachusetts Automobile Insurance Policy.
Always refer to your Policy for the exact terms and conditions
of your automobile insurance. If you receive this guide after
you have renewed your policy for 1990, and you wish to make
changes in your coverage, limits, deductibles or discounts,
contact your agent or company. They can assist you in making
the necessary changes. If you need further information on
automobile insurance, contact the Division of Insurance at 280
Friend Street, Boston, MA 02114 (617) 727-7189 or 436 Dwight
Street, Room 338, Springfield, MA 01103, (413) 784-1190.
Timothy H. Gailey
Commissioner of Insurance
COMPULSORY COVERAGES
Since 1927, under Massachusetts insurance law, motorists
have been required to purchase compulsory motor vehicle
liability insurance. All registered motor vehicles in the
Commonwealth must be insured under Parts 1, 2, 3 and 4 of the
Massachusetts Automobile Insurance Policy. When you buy this
insurance, you receive financial protection in case you become
involved in an accident.
Of course, not all insurance-buying decisions are simple
or clear-cut, because you cannot predict the future. When in
doubt, remember that it is more important to have insurance
against large losses which could threaten your standard of
living than smaller losses that you can afford to pay yourself.
Compulsory Coverages
Part 1: BODILY INJURY TO OTHERS will pay for the damages
to anyone injured or killed by your auto in Massachusetts up to
a limit of $10,000 per person and $20,000 per accident.
Part 1 applies whether your auto is being driven by you
or by someone else with your permission. However, this
coverage never covers injuries to the driver of your auto or to
guests in your auto.
Limits higher than $10,000 per person and $20,000 per
accident and coverage for injuries incurred by guest occupants
of your auto and for out-of-state accidents may be purchased
under Part 5.
Part 2: PERSONAL INJURY PROTECTION (PIP), provides
payment of up to $8,000 to you, anyone driving your auto with
your consent, anyone living in your household, passengers in
your auto and pedestrians struck by your auto, for expenses
incurred as the result of an accident, without regard to
fault. PIP pays for medical expenses, replacement services and
75% of any lost wages.
If you already have good health insurance and disability
health plans - provided by your employer, for example - you
should consider taking a deductible and excluding yourself and
the members of your household from this coverage. However,
remember that even with a comprehensive health insurance plan,
you would not be provided with coverage for lost wages and
replacement services, unless your employer offers a wage
continuation program.
Even with a large deductible for you and members of your
household, guests in your automobile and pedestrians are still
fully covered.
Part 3: BODILY INJURY CAUSED BY AN UNINSURED AUTO
protects you, members of your household, and guests in your
automobile against losses caused by an uninsured automobile, or
from a hit-and-run accident, unless the household member or
guest is protected by their own or another auto insurance
policy. In addition, this coverage protects you and members of
your household as pedestrians against injuries caused by an
uninsured auto or a hit-and-run driver.
Compulsory uninsured automobile coverage requires a
minimum limit of $10,000 per person and $20,000 per accident.
Increasing this coverage makes good sense for most people,
especially for persons who travel outside of Massachusetts, as
compulsory auto insurance is not mandatory in all states.
Please keep in mind that you can purchase Part 3
coverage with limits that are lower than but not higher than
the limits you purchase for Part 5. It is recommended that you
purchase this coverage in limits equal to the limits you
purchase under Part 5.
Part 4: DAMAGE TO SOMEONE ELSE'S PROPERTY pays for
property damage and for costs resulting from the loss of the
use of property damaged from an accident caused by you, a
household member or anyone using your auto with permission.
This Part never covers damage to your automobile or property.
The minimum amount required is $5000. However, you
should consider purchasing this insurance with higher limits.
Today's new car and repair prices being what they are, a limit
of $25,000 is a good choice for many people.
OPTIONAL COVERAGES
There are eight other coverages available to you in
addition to the compulsory insurance, and in general it is up
to you whether you purchase them or not. These optional
coverages provide additional protection against financial loss
resulting from an automobile accident. If you have borrowed
money to purchase your automobile, your lender may legally
require you to carry the optional coverages, Collision (Part 7)
and Comprehensive (Part 9).
. Your insurance company may refuse to issue you some optional
coverages because of certain prior driving violations or
insurance-related crimes.
Optional Coverages
Part 5: OPTIONAL BODILY INJURY TO OTHERS allows you to
extend the protection you must purchase under Part 1, by
offering coverage above the $10,000/$20,000 limit for injuries
caused by you in Massachusetts, in other parts of the United
States and in Canada.
Unlike the compulsory Bodily Injury insurance, Part 5
will pay for injuries to guests of your automobile and for
injuries to others caused by any person who is using your car
with your consent.
To protect your assets and future income, it makes good
sense to buy higher limits under this Part; $100,000 per person
and $300,000 per accident will meet most drivers needs. Such
additional coverage is valuable since, considering the rising
costs of medical and hospital care, court judgments can easily
exceed $20,000.
Part 6: MEDICAL PAYMENTS covers medical expenses for
injuries resulting from any accident involving you, any
household member and any passenger, once the limits provided
under Part 2, Personal Injury Protection have been exhausted.
It does not cover lost wages. Drivers who have comprehensive
health insurance plans may not need the extra coverage provided
under Part 6.
You should, however, think about buying this Part if you
and your household members do not already have adequate health
insurance or if you want this protection for passengers in your
automobile.
Part 7: COLLISION insurance pays for damage to your
automobile caused by a collision regardless of fault. The cost
of collision protection varies with the model and year of your
automobile, where it is garaged and the operator
classification. Because it pays for damages regardless of
fault, this Part is expensive to purchase.
Unfortunately, there is no good rule-of-thumb to use
when purchasing Collision coverage. If your automobile is
financed, your lender may require you to carry this Part on
your policy. However, if you own your automobile outright,
your decision to purchase Collision should depend on whether or
not you can afford to replace your automobile without help from
your insurance company.
A deductible is the portion of each claim you agree not
to be covered for. For example, if you purchase Collision with
the standard $500 deductible and you suffer a loss of $700, you
will collect $200 from your insurance company. If a loss of
less than $500 occurs, you are responsible for the entire
amount. Collision protection can be purchased at a much lower
price when you purchase a deductible higher than the standard
$500 deductible. Choose the larger deductible if you can
afford to pay a larger loss out of your own pocket. You also
have the option to purchase the more expensive $300
deductible. The choice is not an easy one, so take the time to
evaluate your financial circumstances when purchasing this and
any other available deductible.
Your company may require a $500 Collision or Limited
Collision deductible if you have had a major at-fault accident
within the previous three years.
WAIVER OF DEDUCTIBLE coverage may be purchased at a
higher premium if you opt to purchase Collision coverage. The
Waiver of Deductible allows any deductible you choose to be
ignored in cases of fault on the part of another identifiable
driver. The deductible would not be waived in a hit-and-run
accident, even if the unidentifiable party was completely at
fault.
You might choose to purchase the Waiver of Deductible
for the benefit it offers if you are involved in an accident
caused by an identifiable, insured driver. While many
policyholders are willing to pay the additional cost for the
Waiver of Deductible's convenience, others view the benefits as
too few to justify the extra premium.
NOTE: Your failure to list a household member as an
operator on your policy may have very serious consequences.
Your insurer will not pay for a Collision loss for an accident
which occurs while your auto is being operated by a household
member who is not listed as an operator on your policy.
Payment is withheld when the household member, if listed, would
require the payment of additional premium on your policy
because the household member would be classified as an
inexperienced operator or a higher rating step would be
assigned under the Safe Driver Insurance Plan.
Part 8: LIMITED COLLISION also pays for damages to your
automobile caused by a collision, although in limited
circumstances. Because this coverage is not as broad as Part
7, its cost is considerably less.
This coverage will not pay for one-car accidents,
accidents in which you are more than 50% at fault or for
accidents where the owner or driver of the other vehicle cannot
be identified. Limited Collision will pay for most other
accidents and offers the convenience of dealing with your own
insurance company.
If you are willing to pay for the damage you might cause
to your auto, or if the value of your auto does not justify
purchasing full Collision coverage, then Limited Collision or
no collision coverage is your best bet.
You may reduce or eliminate the $500 standard Limited
Collision deductible for an extra premium.
NOTE: Your failure to list a household member as an
operator on your policy may have very serious consequences.
Your insurer will not pay for a Limited Collision loss for an
accident which occurs while your auto is being operated by a
household member who is not listed as an operator on your
policy. Payment is withheld when the household member, if
listed, would require the payment of additional premium on your
policy because the household member would be classified as an
inexperienced operator or a higher rating step would be
assigned under the Safe Driver Insurance Plan.
Part 9: COMPREHENSIVE coverage will pay for losses which
are not caused by a collision, such as fire, theft and
vandalism losses. In addition, this insurance will pay you up
to $15 a day for substitute transportation until your stolen
auto is recovered (up to a limit of $450).
Comprehensive coverage does not insure personal
belongings in your auto unless they have been made a permanent
part of your automobile. This means that clothing is never
covered, but a C.B. radio permanently installed in the opening
of the dash or console is.
The standard deductible for Comprehensive coverage is
$500, although you have the option to purchase a $300
deductible. As with the Collision coverage, buying back to the
lower deductible will raise your premium cost. Seriously
consider choosing a larger deductible than the standard one if
you can afford to pay a larger loss out of your own pocket.
You should also consider installing an anti-theft device and/or
a signal-activated vehicle recovery system. Anti-theft
equipment and recovery system discounts, which are discussed in
the Saving Money Section, range from 5% to 35%.
You also have the option of purchasing a $100 deductible
on glass claims. If you take a deductible, you will reduce the
cost of your Comprehensive coverage by %, however if you have
a claim for a broken windshield or other glass damage, you will
have to pay for the first $100 of that damage.
Part 10: SUBSTITUTE TRANSPORTATION pays up to $15 a day
for car rental, taxicab fares and other transportation costs
(up to a limit of $450).
You should carefully consider whether you need this
coverage. Claims for loss of use caused by another driver are
generally payable under that driver's Damage To Someone Else's
Property coverage (Part 4). Comprehensive Coverage (Part 9)
provides reimbursement for loss of use resulting from theft.
Moreover, Substitute Transportation coverage does not pay under
all conditions. If your auto is being repaired or replaced
because of damages that would be covered under Collision
coverage (Part 7), you can collect under Part 10. There is no
coverage, however, if your auto is merely in the shop for
routine repairs.
Please note that if you are under the legal age or have
a poor credit rating you may be unable to rent a vehicle.
However, you do remain eligible for the reimbursement of
transportation expenses.
Part 11: TOWING AND LABOR will pay up to $25 for towing
and labor charges each time your automobile breaks down. The
cost of replacement parts is not covered and labor is covered
only to get your auto going again at the place of breakdown.
If you belong to a motor club, you may already have
Towing and Labor coverage - so check your club's benefits
before purchasing Part 11.
Your insurance company may legally refuse to sell you
Towing and Labor coverage.
Part 12: BODILY INJURY CAUSED BY AN UNDERINSURED AUTO
will pay damages for bodily injury to people injured or killed
as the result of certain accidents caused by someone who does
not have enough insurance, up to the difference between the
total amount collected from the automobile bodily injury
liability insurance covering the owner and the operator of the
auto and the limits you purchased for this coverage.
Your company will pay damages to or for you, or any
household member, unless the household member has his or her
own Massachusetts auto policy or is covered by a Massachusetts
auto policy of a household member providing similar coverage
with higher limits, if you are injured as a pedestrian or while
occupying an auto you do not own. It will also pay damages to
or for anyone else occupying your auto unless that person has
his or her own Massachusetts auto policy or is covered by a
Massachusetts auto policy of any household member providing
similar coverage.
Below are some examples of how this coverage works:
EXAMPLE 1 - You do not buy the Underinsured Auto coverage. You
are injured in an auto accident caused by the other driver who
is legally responsible for your injuries. Your damages total
$20,000. The other driver's Bodily Injury liability limit is
$10,000. You can collect $10,000 from the other driver's
insurance, but you must sue the other driver to collect the
other $10,000. If the other driver has no assets, you could
suffer a loss of $10,000.
EXAMPLE 2 - You purchase Underinsured Auto coverage limits of
$20,000 per person; $40,000 per accident. Your damages are
$30,000. The other driver's policy provides $10,000 of Bodily
Injury liability insurance, which you collect from his
company. You can only collect an additional $10,000 from your
company. This is the difference between the amount collected
from all automobile Bodily Injury liability limits and your
Underinsured Auto limit of $20,000 for each person.
EXAMPLE 3 - You purchase Underinsured Auto coverage limits of
$20,000 per person; $40,000 per accident. Your damages are
$20,000. The other driver's policy provides $10,000 of Bodily
Injury liability insurance which you collect from his company.
Your Underinsured Auto coverage will pay you $10,000 in full
payment of your outstanding damages. This is the difference
between the other driver's Bodily Injury limits and your
Underinsured Auto coverage limits.
Keep in mind that since all registered motor vehicles
must have the compulsory Bodily Injury limits of $10,000 per
person; $20,000 per accident, purchasing Underinsured Auto
coverage limits of $10,000/$20,000 provides little or no
coverage. If you choose to purchase Underinsurance coverage,
you may buy limits that are less than but not higher than the
limits purchased under Part 5, however it is recommended that
you buy it in limits equal to the limits you purchase under
Part 5.
SAVING MONEY
Getting the discounts you are entitled to, paying
attention to detail and driving conscientiously can all work to
keep your insurance costs down. By following the suggestions
listed below, you will maximize the available savings.
Be An Alert Shopper
Before choosing your coverages, limits and deductibles,
read the Massachusetts Automobile Insurance Policy carefully to
be certain that you understand the coverages. Assess your
driving habits in order to determine the coverages and limits
you need. When filling out the application, make sure that you
complete it accurately in order for your policy to be rated
properly. Finally, when you receive your Coverage Selections
Page, do not file it away without checking to see that the
coverages, limits, deductibles, discounts and premium are
correct.
Review Your Bill
You do not leave the store without a receipt - and you
should not buy auto insurance without an itemized bill!
First, look at your bill to find out whether any part of
the total cost is for service fees. Although some agents and
brokers charge nothing for the additional effort needed to fill
out various forms or to bring your license plates from the
Registry, others will charge you a fee for performing such
services. However, no agent or broker can charge service fees
in connection with issuing or renewing your automobile
insurance policy, nor are you legally bound to pay for any
other services your agent or broker performs without your
consent.
Your itemized bill should tell you whether you have been
enrolled in a motor club. Obviously, if you do not want to
join a motor club or if you are already a member of a different
motor club, you should not pay the membership dues. If you do
belong to a motor club, check to see if membership includes
benefits similar to the Towing/Labor and Substitute
Transportation coverages - there is no point in buying
duplicate coverage.
Of course, the main thing your insurance bill will tell
you is how much you owe. According to state law, no company,
agent or broker can ask you to pay more than 30% of your
premium before you renew your coverage (although you may pay
more than 30% if you wish). However, if you have defaulted on
a premium payment during the previous twenty-four months, your
insurer can legally require payment of 100% of your premium.
Should you choose to pay less than your total bill, it
is likely that you will have to pay some kind of finance
charge. Choose your finance plan carefully. Commercial
lenders and insurance premium finance agencies charge up to 18%
interest per year on the unpaid balance. Insurance premium
finance agencies may also charge an additional $16 fee for
setting up the account.
For many policyholders, another way of making time
payments is to do business with an insurance company that will
bill you in installments and charge a flat fee for each
billing. These charges vary from company to company and
according to the number of installments you want to make. In
some instances the company's carrying charges will cost less
than other financing arrangements.
Discount Opportunities
Be particularly careful to answer those application
questions relating to the following five discounts, which can
cut your insurance costs considerably if you qualify for them.
* Low Mileage Discount - If you drive 5,000 or fewer
miles per year, you are eligible for the maximum 10% discount.
If you drive between 5,001 and 7,500 miles per year, you are
eligible for a 5% discount. The discount applies to all
coverages except Comprehensive, Substitute Transportation and
Towing and Labor, and applies to the rate for each insured car
as otherwise determined by territory, driver class, vehicle
model year and symbol, prior to the application of SDIP
surcharges or credits.
* Senior Citizen Discount - Drivers 65 years or older
who are principal operators of their cars receive a 25%
reduction on all their auto coverages, provided there is no
inexperienced driver (one with less than six years of driving
experience) listed on their policies. Cars used for business
are not eligible. The 25% discount does not apply to SDIP
Surcharge Points.
* Public Transportation Discount - Choosing to take
public transportation instead of using your automobile can save
you 10% on your property damage liability and collision
coverages. The maximum discount is $75. To obtain this
discount, you must show evidence of purchase of 11 months of
commuter passes or tickets from a qualified transit system.
* Anti-Theft and Recovery System Discounts-
Policyholders who install certain kinds of anti-theft devices
are eligible for a 5%, 15%, or 20% discount on Comprehensive
coverages. The installation of a signal-activated vehicle
recovery system, in combination with an approved anti-theft
device, can qualify you for a savings between 25%-35%. The
size of the discount varies, depending on the kind of
anti-theft device, and whether it is combined with a vehicle
recovery system.
You should seriously consider buying and using some kind
of anti-theft device and/or vehicle recovery system. Before
you choose a particular brand or model, check with your agent,
broker or company representative about the discount. A quick
check before you buy can help you avoid an expensive
misunderstanding later.
* Multi-Vehicle Discount - Individuals and married
couples who own more than one car and insure them for Collision
or Limited Collision coverage with the same company can get a
5% discount on these coverages. This discount is available
only to experienced drivers.
Inexperienced drivers can realize a 10% savings on three
of the four compulsory coverages and on optional liability and
collision coverages, if they complete an approved
driver-training course. The savings is calculated into the
rates for the particular driver classifications.
Finally, you can affect the cost of your policy by how
you and the other operators of your auto drive. You will
receive Credit Points on your policy if you and the other
operators maintain good driving records. More detailed
information about the Safe Driver Insurance Plan can be found
in Part 4 of this guide.
THE 1990 SAFE DRIVER INSURANCE PLAN
If you and the other drivers listed on your policy have
incident-free driving history records, then your insurance
premium for Bodily Injury to Others (Part l), Personal Injury
Protection (Part 2), Damage to Someone Else's Property (Part 4)
and Collision (Part 7) coverages will be reduced by the
application of Credit Points, helping to lower your total
automobile insurance bill. If you or any other driver listed
on your policy caused an accident or violated any surchargeable
motor vehicle traffic law, your insurance premium for Parts 1,
2, 4, and 7 will increase due to the application of Surcharge
Points.
The 1990 Safe Driver Insurance Plan 211 CMR 125.00 is
published in accordance with the authority granted to the
Commissioner of Insurance under Massachusetts General Laws
Chapter 175 Section 113B.
HIGHLIGHTS OF THE 1990 SAFE DRIVER INSURANCE PLAN
* All operators on a policy will be assigned an SDIP
Step.
* Six years of driving history will be used to rate your
policy.
* An SDIP Step is determined by adding Surcharge Points
for surchargeable incidents within the policy Experience
Period to a starting step value of 15 and subtracting
Credit Points for each year of incident-free driving
within the policy Experience Period for which the
operator was licensed to drive in Massachusetts.
* Operators will receive one Credit Point for each year
of incident-free driving for which they were licensed to
drive in Massachusetts.
* Surcharge Points for Surchargeable Incidents have
increased.
* Aging of incidents has been eliminated.
SAFE DRIVER INSURANCE PLAN (SDIP) STEPS
The 1990 Safe Driver Insurance Plan assigns an SDIP Step
to each operator listed on a policy. For policy year 1990 the
SDIP Step range is from 09 to 35. SDIP Step 09 is the Best
Credit Step for 1990.
All operators enter the step system at Step 15, the
neutral step - no increase or decrease in automobile insurance
premium. Each operator's SDIP Step is computed by adding to
the starting step value of 15, Surcharge Points for
surchargeable incidents within the policy Experience Period,
and then subtracting Credit Points earned by the operator for
each incident-free year within the policy Experience Period or
special Credit Points for the Clean Slate Rule.
This equation will help you determine your operator SDIP
Step:
STARTING STEP 15
+ SURCHARGE POINTS
- CREDIT POINTS
----------------------
= OPERATOR'S SDIP STEP
EXPERIENCE PERIOD
The Experience Period of a 1990 policy is the 6 year
period immediately preceding the policy effective date. The
Experience Period is expected to increase each year by 1 year
up to 15 years. For example, the Experience Period of a policy
in 1991 is expected to be 7 years.
CREDIT POINTS
One Credit Point is subtracted from the starting step of
15 for each incident-free year of driving during the policy
Experience Period. An incident free year of driving is any of
the 1-year periods immediately preceding the policy effective
date for which the operator has been licensed to drive in
Massachusetts and during which the operator has not had a
surchargeable at-fault accident or motor vehicle traffic
violation.
EXAMPLE: If you have been licensed to drive in
Massachusetts for 10 years, there are no surchargeable
incidents on your driving history record and your policy
effective date is 01/01/90, you will be placed at SDIP Step 09,
the Best Credit, for 1990. To compute this yourself, first
determine either the date you obtained your Massachusetts
driver's license or the beginning date of your policy
Experience Period (preceding 6 years), whichever is later. In
this example, 01/01/84, the beginning date of the policy
Experience Period, is later. Next, subtract 6 Credit Points -
1 point for each incident-free year within the Experience
Period - from the neutral step 15. The resulting number is
your operator SDIP Step.
STARTING STEP 01/01/84 15
CREDIT POINTS - 06
-----
OPERATOR SDIP STEP = 09
Operators with less than 6 years of driving experience
will receive Credit Points for only those incident-free years
for which they were licensed to drive in Massachusetts.
Operators licensed to drive in Massachusetts for less
than 1 year will be placed at SDIP Step 15, the neutral step.
SURCHARGEABLE INCIDENTS AND SURCHARGE POINTS
At-Fault Accidents - If you are involved in an accident
and you file a Collision claim, or if another person
files a claim under Damage To Someone Else's Property, your
insurance company must determine who was more than 50%
at-fault. It makes no difference whether the at-fault accident
occurred within the Commonwealth or out-of-state.
There are two types of at-fault accidents. A Minor
At-Fault Accident is a claim payment under Damage to Someone
Else's Property, Collision or Limited Collision coverage of
more than $200 but not more than $1,500 and a Major At-Fault
Accident is a claim payment under Damage to Someone Else's
Property, Collision or Limited Collision coverage of more than
$1,500.
If your company finds that you were at-fault and pays a
claim of more than $200, the at-fault accident will be added to
your operator's driving history record and your company will
send you a Surcharge Notice. The Surcharge Date for an
at-fault accident is the Date of Notice entered by your insurer
on the Surcharge Notice form. The accident will become part of
your driving history record unless the company withdraws the
Surcharge Notice or you successfully appeal the notice to the
Board of Appeal.
Appealing At-Fault Accidents- Accident surcharges must
be appealed at the time you receive the Surcharge Notice from
your insurance company. Detailed instructions for filing an
appeal are on the Surcharge Notice. The Board of Appeal on
Motor Vehicle Liability Policies and Bonds will hold the
hearing and will notify you, your company and the Merit Rating
Board of its decision. If the Board determines that you were
not more than 50% at-fault in the accident, the Merit Rating
Board will remove the incident from your driving history record.
If your premium is increased due to Surcharge Points for
an at-fault accident while your appeal is pending, you must pay
the additional premium or your policy will be cancelled. Your
policy will be re-rated by your insurance company if you win
your appeal.
If you have any questions concerning an appeal of a
Surcharge Notice, contact the Board of Appeal at (617)
727-7189, extension #223.
Motor Vehicle Traffic Law Violations - If you are
convicted of, or make payments for, violating certain motor
vehicle traffic laws, or are assigned to an alcohol education
program, the court will notify the Merit Rating Board. The
motor vehicle traffic law violation will be added to your
driving history record. The court judgment date is the
Surcharge Date for a motor vehicle traffic law violation.
Surcharge Points are not assigned to a non-criminal
minor motor vehicle traffic law violation if it is the first
motor vehicle traffic law violation in the operator's policy
Experience Period. No Surcharge Points are assessed for the
incident but no Credit Points are calculated for the year in
which the surcharge date is recorded, since the operator does
not have an incident-free year.
A list of all surchargeable Motor Vehicle Traffic Law
Violations can be obtained from the Merit Rating Board.
Out of-State Violations - Convictions of Motor Vehicle
Traffic Laws outside the Commonwealth that are reported to the
Registry of Motor Vehicles will be added to the operator's
driving history record and will be subject to Surcharge Points.
Surcharge Points - The number of Surcharge Points
assigned to each surchargeable incident is determined by the
type of incident:
Minor Traffic Law Violation 2 Surcharge Points
Minor At-Fault Accident 3 Surcharge Points
Major At-Fault Accident 4 Surcharge Points
Major Traffic Law Violation 5 Surcharge Points
EXAMPLE: If you have been licensed to drive in
Massachusetts for 8 years; you have 2 Minor Traffic Law
Violations and 1 Minor At-Fault Accident on your driving
history record and your policy effective date is 01/01/90, then
your SDIP Step will be 17.
STARTING STEP 01/01/84 15
Incident Date Surcharge Date
SPEEDING 12/01/84 12/22/84 00
MINOR AT-FAULT ACCIDENT 07/17/87 08/18/87 03
SPEEDING 04/24/88 05/02/88 02
CREDIT POINTS (incident-free years 1985, 1986 and 1989) - 03
----
OPERATOR SDIP STEP = 17
COMPREHENSIVE CLAIMS
Your insurance company is required to notify the Merit
Rating Board when a Comprehensive claim has been paid.
Comprehensive claims are added to the policyholder's driving
history record. In future years the Comprehensive coverage on
your private passenger automobile insurance policy may be
subject to Surcharge Points if you submit four or more
Comprehensive claims on or after January 1, 1984, totaling
$2,000 or more.
Surcharge Points for Comprehensive claims will not be
applied for policies effective in 1990.
ASSIGNMENT OF OPERATOR SDIP STEPS TO VEHICLES LISTED ON A POLICY
After each operator listed on your policy is assigned an
SDIP Step, the operators are assigned to the vehicles listed on
the policy. The listed operator with the highest Step is
assigned to the vehicle with the highest combined premium for
Parts 1, 2, 4, and 7. For each subsequent vehicle, the listed
operator with the next highest Step is assigned to the vehicle
with the next highest combined premium until all the vehicles
have been exhausted. An operator's SDIP Step greater than SDIP
Step 15 can not be billed on more than one policy in effect at
the same time.
When there are more vehicles than operators listed on a
policy, the excess vehicles are assigned the step of the
operator with the lowest Step unless such operator's Step is
above SDIP Step 15. In such case, the excess vehicles are
assigned SDIP Step 15.
EXAMPLE: A policy lists four (4) vehicles and three (3)
operators: Operator A's SDIP Step is 20, Operator B's SDIP
Step is 15 and Operator C's SDIP Step is 09.
Vehicles Operators
1 A. SDIP Step 20
2 B. SDIP Step 15
3 C. SDIP Step 09
4 C. SDIP Step 09
APPLICATION OF PREMIUM ADJUSTMENTS TO COVERAGES
An operator's SDIP Step determines how much of an
adjustment will be made to the policy premium. SDIP Steps 09
(Best Credit) to 14 are Credit Steps. For each step below 15
the operator's premium will be adjusted downwards. Step 15 is
the neutral step, which means the operator is neither in credit
nor surcharge status, and will not receive a reduction or an
increase in premium. Step 16 through 35 are Surcharge Steps.
For each step above 15 the operator's premium will be adjusted
upwards. If you wish to calculate the actual amount of your
credit or surcharge, refer to "Calculation of SDIP Credits and
Surcharges" at the end of this section.
Liability Premium- Each step represents a 7% change in
the following liability coverages:
Part l: Bodily Injury to Others
Part 2: Personal Injury Protection
Part 4: Damage to Someone Else's Property (PDL)
Collision Premium- Each step represents a 5% change in
Collision Coverage:
Part 7: Collision
Example: If you have been licensed to drive in
Massachusetts for six years; you have no incidents on your
6-year driving history record; your SDIP Step is 09; and you
have Liability and Collision coverages on your policy, then you
will receive a 42% (7% X 6 steps) reduction on your Liability
coverages and a 30% (5% X 6 steps) reduction on your Collision
coverage.
CLEAN SLATE RULES
The Safe Driver Insurance Plan provides incentives to
operator's who have incidents on their record in the early
years of the Experience Period, but in subsequent years have
maintained clean driving history records.
Transitional Clean Slate Rule- In order to ensure a fair
and equitable transition from the 1989 Safe Driver Insurance
Plan, the 1990 Safe Driver Insurance Plan includes a Clean
Slate Rule. For 1990, a 3-Year Clean Slate Rule will place an
operator in a credit step if that operator would have been in
credit status under the 1989 SDIP.
If the operator's SDIP Step is greater than 15, the
operator's SDIP Step will be set at 14 if all of the following
conditions for the Clean Slate Rule are met:
Three (3) Year Clean Slate Rule applies to an operator on a
1990 policy if:
a. the operator has a three year period of incident free
driving within the policy Experience Period;
b. the three year period occurs after 1/1/87 and before
12/31/90;
c. the operator had a valid Massachusetts driver license
for the entire three year incident-free period; and
d. the operator's SDIP step at the end of the incident-free
period would be greater than 14. Then the operator's
SDIP step is set to 14.
Points for surchargeable incidents within the policy Experience
Period which have surcharge dates that are recorded after this
3-year incident free period are added to operator SDIP Step 14.
Clean Slate Incentive- As an incentive to promote safe
driving, a Five (5) Year Clean Slate provision has been added
for policies effective after 1991. If an operator maintains
five consecutive years of incident-free driving within the
policy Experience Period, and the operator's SDIP Step is
greater than 15, then the operator's SDIP Step will be set at
15. The operator must have a valid Massachusetts driver's
license for the entire five year incident free period.
SAFE DRIVER INSURANCE PLAN (SDIP) STATEMENT
Your insurance company is required to send you a Safe
Driver Insurance Plan (SDIP) Statement if you or any operator
listed on your policy are not assigned Operator Step 09, the
Best Credit for 1990.
REFUSAL TO PAY A PREMIUM INCREASE
If you refuse to pay your premium increase due to
Surcharge Points, your insurance company will cancel your
policy after sending you the Notice of Cancellation required by
law.
RECORD ERROR OR BILLING PROBLEMS
If you believe a billing is erroneous, you should first
contact your insurance agent, broker or company. Make sure you
have all necessary information on hand, including your Coverage
Selections Page, Safe Driver Insurance Plan (SDIP) Statement
and copies of your billings.
If you question the accuracy of your driving history
record as shown on your Safe Driver Insurance Plan (SDIP)
Statement call or write the Merit Rating Board's Insurance
Company Services Section, 100 Nashua Street, 6th Floor, Boston,
MA 02114, (617) 727-7017. You must pay a billed premium while
the matter is under investigation or your insurance company
will cancel your policy. If an error is discovered, it will be
corrected and all parties will be notified in writing. If you
were erroneously billed your insurance company will re-rate
your policy.
OBTAINING A COPY OF YOUR OPERATOR DRIVING HISTORY RECORD
You may obtain a copy of your operator driving history
record from the Merit Rating Board. This detailed record will
show six years of your active surchargeable incidents on file
at the Merit Rating Board. The cost is $3.00. DO NOT MAIL
CASH. Make check or money order payable to the Commonwealth of
Massachusetts.
No fee is required to inspect your computer record at
the Merit Rating Board's office. However, a prior appointment
must be made with the Board's Insurance Company Service Section.
CALCULATION OF SDIP CREDITS AND SURCHARGES
Your total policy credit or surcharge is determined by
multiplying the coverage premium shown on your Coverage
Selections Page by the factor which corresponds to your SDIP
Step (see below), and then adding the products for all four
coverages. Subtract this number from your total premium if you
are determining a credit. Add this number to your total premium
if you are determining a surcharge.
================================================================
SURCHARGE FACTORS
Step Part 1 Part 2 Part 4 Part 7
Number BI to Others PIP Property Collision
Damage
------ --------- ------- -------- -------
35 1.40 1.40 1.40 1.00
34 1.33 1.33 1.33 0.95
33 1.26 1.26 1.26 0.90
32 1.19 1.19 1.19 0.85
31 1.12 1.12 1.12 0.85
30 1.05 1.05 1.05 0.75
29 0.98 0.98 0.98 0.70
28 0.91 0.91 0.91 0.65
27 0.84 0.84 0.84 0.60
26 0.77 0.77 0.77 0.55
25 0.70 0.70 0.70 0.50
24 0.63 0.63 0.63 0.45
23 0.56 0.56 0.56 0.40
22 0.49 0.49 0.49 0.35
21 0.42 0.42 0.42 0.30
20 0.35 0.35 0.35 0.25
19 0.28 0.28 0.28 0.20
18 0.21 0.21 0.21 0.15
17 0.14 0.14 0.14 0.10
16 0.07 0.07 0.07 0.05
=================================================================
NO CREDIT/NO SURCHARGE FACTORS
Step
Number Part 1 Part 2 Part 4 Part 7
------ ------- ------ ------ ------
15 0.000 0.000 0.000 0.000
=================================================================
SURCHARGE FACTORS
Step
Number Part 1 Part 2 Part 4 Part 7
------ --------- ------- ------ ------
14 0.07 0.07 0.07 0.05
13 0.14 0.14 0.14 0.10
12 0.21 0.21 0.21 0.15
11 0.28 0.28 0.28 0.20
BEST 10 0.35 0.35 0.35 0.25
CREDIT= 09 0.42 0.42 0.42 0.30
================================================================
The Division would like to thank the Merit Rating Board for its
preparation of this section of the guide.
FILING A COMPLAINT
If you believe that your insurance company has acted
improperly in issuing, renewing or cancelling your automobile
insurance policy, or has refused to pay all or part of a fair
claim, or your agent, broker or company has misrepresented you,
you have the right to file a complaint and seek a resolution.
The problem may be due to a simple error, and may be
corrected with an inquiry over the telephone. Contact your
agent, broker or company representative. Make sure you have all
necessary information on hand, such as the policy or account
number, a clear and concise description of the problem and any
other important information.
If you do not receive a prompt, satisfactory response,
write a letter to the company briefly explaining your problem and
what you expect to be done to correct it. It may be a good idea
to send the letter by registered mail to guarantee that the
company receives it.
If you still feel you have been treated unfairly, send a
complaint letter to the Division of Insurance, and we will assist
you in resolving your problem. Be sure to include your name,
address, and phone number; the name of the agent, broker or
insurance company; the policy number; and a brief description of
the problem. Make sure you keep a copy of the letter and any
other documents you include with the letter, for your own
records. Keep all letters, receipts, bills and policies together
for easy reference. The Division of Insurance has Consumer
Service offices located at:
280 Friend Street 436 Dwight Street, Rm. 438
Boston, MA 02114 Springfield, MA 01103
(617) 727-3333 (413) 784-1190
We will make every effort to ensure that your valid
complaint is resolved in a satisfactory manner, by investigating
the problem, clarifying misunderstandings and making sure you get
clear responses to your questions. We cannot however, guarantee
a favorable action on your complaint if it is not supported by
facts or the law, nor can we provide legal services that may be
required to settle a more complicated complaint.