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The state of Massachusetts imposes the minimum amount limits for auto insurance policies sold within the state--$20,000 for bodily injuries per person, $40,000 for total bodily injuries per accident, and $5,000 for damage on property. Oftentimes, drivers find these limits not enough to pay for any liabilities incurred during accidents, prompting them to purchase higher limits of coverage.

All licensed drivers in the state are required to purchase auto insurance, with each policyholder required to list all licensed drivers in his or her household in the policy, including those already covered under different auto insurance policies.

Recently, the state has allowed auto insurance providers are now allowed to set and implement their own premium rates, subject to the approval of the Commissioner of Insurance, of course. Consequently, each potential policyholder may get different auto insurance quotes from different providers once they shop around. To this end, it is important for auto insurance consumers to scrutinize and evaluate each insurance quote in order to determine which auto insurance product best suits their needs and budget.

The state also allows insurance providers to impose surcharges on at-fault drivers who process settlement claims. Furthermore, they have the option of using the 2007 Safe Driver Insurance Plan (SDIP) or their own Merit Rating Plan in order to determine the exact amount of surcharges they will impose. However, the individual Merit Rating Plan of insurance companies are still subject to the approval of the Commissioner of Insurance prior to implementation.

The SDIP is a merit rating system established by the state with the primary aim of promoting safe driving by licensed drivers all throughout Massachusetts. This plan assigns points or credits to drivers who do not cause accidents. The credits are then applied toward the purchase of more affordable auto insurance policies. On the other hand, drivers who have been found to be at fault during accidents are required to pay higher premium rates on their auto insurance policies. These additional charges are termed surcharges and are also imposed if a driver has been convicted of traffic violations or who are required to undergo an alcohol education program. However, the state also allows drivers who have been imposed with surcharges to appeal to the Division of Insurance Board of Appeal to contest any added costs to their auto insurance policies.

The state has also created the Massachusetts Automobile Insurance Plan which caters to those who are unable to secure auto insurance policies on their own. Under this plan, drivers are assigned to an insurer who will agree to provide coverage. Under this particular scenario, the driver cannot choose the insurance company that will provide coverage, as it is the role of the Commonwealth Automobile Reinsurers, the plan’s administrators, to assign the insurance provider based on market share of the company. The state also imposes conditions in which no insurance provider is allowed to deny the renewal of an auto insurance policy. If the driver is classified as a ‘Clean-in-Three’ driver, then his or her policy must be guaranteed to be renewal. A driver can only be classified as such if he or she has been driving for at least 36 months within the state prior to the effective date of the insurance policy and has enjoyed continued auto insurance coverage within the same time period. A ‘Clean-in-Three’ driver must not also be proven to be at fault for traffic violations and has no conviction for DUI or vehicular felony for the same period.