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Auto Insurance - All the Details — Ratings of Car Insurance companies and advice on coverages, price,
where to complain, ... more (by Boston Consumers' CHECKBOOK, Fall 2013/Winter 2014)
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Auto Insurance

The Full Story: All Our Advice 

Coverage Options...And How Much to Buy

The first step in shopping for auto insurance is to decide on the types and levels of coverage that will keep your risk to an acceptable level for a reasonable annual premium. You will have to choose from a broad range of available auto insurance coverage options. When considering the amount of much coverage, keep in mind that the purpose of insurance is to cover losses you can’t afford to cover yourself. When you buy more insurance than you need, you are simply wasting money. 

Coverages You Must Buy—Parts 1 to 4 

Part 1: Bodily Injury to Others 

Compulsory Bodily Injury to Others coverage pays for damages (for example, medical expenses or pain and suffering) to anyone injured or killed by your car—but only in accidents that occur in Massachusetts—up to a basic limit of $20,000 per person and $40,000 per accident. Injuries to the driver or passengers in your car are not covered under this Part. If you want coverage when you drive outside of Massachusetts, or in places where the public has no right of access, or for guests who ride in your car, you will need to purchase Optional Bodily Injury to Others (Part 5) coverage. 

Part 2: Personal Injury Protection (PIP) 

Personal Injury Protection (PIP) coverage pays up to $8,000 to you or anyone you allow to drive your car, anyone living in your household, passengers, and pedestrians regardless of who causes an accident. PIP coverage pays for medical expenses, replacement services, and 75 percent of any lost wages. PIP coverage includes protection for owners of cars and motorcycles, as well as members of their households, if they are injured while occupying or struck by a car that does not have Massachusetts Compulsory Insurance. 

If you have medical insurance, you can turn to PIP coverage rather than your health plan to cover medical expenses up to $2,000; but if you seek payment from your PIP coverage for medical expenses in excess of $2,000, PIP will pay only after these expenses have been submitted to the health plan and the health plan determines what it will pay. Your PIP coverage will not pay for expenses over $2,000 that your health plan would have paid if you had sought treatment in accordance with the terms of the health plan. 

 The driver and passengers riding a motorcycle are not covered by PIP, but the motorcycle owner must purchase this coverage to protect other people who may be injured by the motorcycle. 

You can lower your premium by accepting a deductible, applicable either to you alone or to you and other members of your household. The policy will pay expenses for you, or you and your household members, only up to the difference between $8,000 and the amount of your deductible. 

Taking a deductible is more attractive if you have health insurance and a disability income plan. But even if you have health insurance, it may not cover all accident-related medical expenses—such as cosmetic and dental services, co-payments, and deductibles—so PIP coverage can still be useful. Taking an $8,000 deductible for PIP coverage instead of no deductible usually only saves about three percent of a policy’s total cost. 

Part 3: Bodily Injury Caused by an Uninsured Auto 

Coverage for Bodily Injury Caused by an Uninsured Auto protects you, anyone you allow to drive your car, household members, and passengers (unless covered by another Massachusetts policy with similar coverage) against losses caused by an uninsured or unidentified (“hit and run”) driver. A minimum limit of $20,000 per person and $40,000 per accident is required. This coverage does not pay for property damage or damage to your auto. Many consumers raise their policies’ limits for this coverage to match the optional higher limits they choose for bodily injury to others coverage (described below). Raising this coverage from the minimum limits to typical 100/300 coverage levels typically adds only three percent to a policy’s total annual cost. 

Part 4: Damage to Someone Else’s Property 

Coverage for Damage to Someone Else’s Property pays not only for damage to another person’s property but also for costs associated with the loss of use of that property when you, a household member, or another authorized driver of your car causes an accident. A minimum limit of $5,000 is required but you can purchase higher limits to protect yourself in case you become liable for major expenses if you cause one or more other cars to be totaled or seriously damaged. It usually adds only about four percent to total premium costs to increase the minimum $5,000 limit to a $50,000 limit, and going from $50,000 to $100,000 usually costs most policyholders only $10 to $20 more per car each year. 

Optional Coverages—Parts 5 to 12 

Part 5: Optional Bodily Injury to Others 

Coverage for Optional Bodily Injury to Others extends your liability protection (the basic 20/40 limits under Compulsory Bodily Injury to Others). This option provides coverage for accidents beyond Massachusetts to anywhere in the U.S., U.S. territories and possessions, and Canada. This coverage also pays for damages suffered by guests in your auto. And under this option, you can increase the coverage limits from the 20/40 limits for Compulsory Bodily Injury to Others (Part 1). 

Most drivers buy coverage above the basic 20/40 limits to protect their assets from catastrophe. Possession of substantial assets (or anticipation of substantial assets in the future) is a compelling reason to purchase sizable additional bodily injury coverage: You have a lot to lose; you are an attractive target for lawsuits; and you might get relatively little sympathy from juries. 

Although buying coverage with higher limits costs more, the price increases are often modest. As this figure shows, policyholders with 50/100 optional bodily injury coverage can expect to increase total annual premiums by only about five percent by moving up to 100/300 coverage; and moving from 100/300 limits to 250/500 would increase premiums by only about 12 percent. Most consumers consider this extra cost a reasonable price to pay for increased peace of mind. 

Part 6: Medical Payments 

Medical Payments coverage pays for medical expenses for you, your household members, and passengers over and above amounts covered by Personal Injury Protection no matter who causes the accident. The minimum amount is $5,000. Minimal Medical Payments coverage is relatively inexpensive, less than $30 per year per car for most consumers, but it still may not be a good option if you have a good health plan. Increasing medical payments coverage to a high limit—say, $25,000—is also relatively inexpensive. But your money would likely be better spent on a more comprehensive health insurance policy, since good health insurance coverage would protect you and your family from catastrophic expenses caused by any disease or injury that might befall you, and not merely cover limited amounts of expenses resulting from injuries that involve automobiles. 

Part 7: Collision 

Collision coverage pays for damage to your car in a collision, less any applicable deductible, no matter who causes the accident. If your car is financed, your lender may require this coverage and also stipulate a particular deductible. 

Most policyholders have $500 deductibles, but you can select a different amount. You can lower your premium substantially by choosing a larger deductible. As this figure shows, our illustrative policyholder would usually lower his or her total premium by about 15 percent by increasing collision and comprehensive deductibles from $500 to $1,000. 

To determine the amount of deductible that is right for you, decide how much you can afford to pay out of pocket in the event of an accident or loss for which you are at fault, or the other driver is unidentified. It doesn’t make sense to buy insurance of any kind—including comprehensive coverage (described below) and PIP coverage (described above)—for expenses that would not be catastrophic. (Insurance generally costs more than the company’s expected payout for losses because the insurer must charge you not only for the losses but also for sales commissions, administrative expenses, claims-handling expenses, fraud losses, and other costs.) 

If your car is old and not worth much, it doesn’t make sense to buy collision (or comprehensive) coverage; you don’t have much to lose. 

Part 9: Comprehensive 

Comprehensive coverage pays for damage to, or loss of, your car, less any applicable deductible, that results from perils such as fire, theft, vandalism, and striking an animal—but not collisions. Personal property is not covered unless it is permanently installed in your car. If your car is financed, your lender may require this coverage. 

You may be denied comprehensive coverage or required to pay a higher extra-risk rate if you own a high-theft vehicle that does not have a qualifying anti-theft or recovery device. Coverage may also be denied or priced higher under certain other conditions. 

As with collision and PIP coverage, a relatively high deductible for comprehensive coverage reduces premiums. 

Part 10: Substitute Transportation 

For an additional premium, you can broaden your comprehensive coverage to include reimbursement for the expense of a rental car and taxi, bus, and train fare while your car is being repaired. 

Given that even a modest level of coverage—typically $30 per day with a limit of $900 per claim—usually costs $30 to $60 per year, our advice is to decline it altogether, since the additional premium costs are very likely to exceed any benefit you’ll ever collect. 

Part 11: Towing and Labor 

Towing and Labor coverage pays up to $50 for towing and labor charges each time your car stops running, whether or not due to an accident. You are covered only for on-site labor costs at the breakdown site (not parts) to tow your car or get it running again. This coverage usually costs $6 to $12 per year, and some insurers offer this coverage at no additional cost. Coverage of up to $100 per disablement is available usually for double the cost of standard coverage. 

If you belong to a motor club, you don’t need this coverage since many motor clubs’ services include towing and labor. 

Part 12: Bodily Injury Caused by an Underinsured Auto 

Coverage for Bodily Injury Caused by an Underinsured Auto pays for bodily injury damages to you, household members, and passengers unless they have a policy of their own or are covered by a Massachusetts auto policy of another household member with similar coverage. The accident must be caused by a driver who doesn’t carry enough bodily injury coverage to pay for your loss. This coverage pays you up to the difference between the total amount collected from the bodily injury liability insurance covering the owner and driver of the other car and the limits you purchased for this coverage. 

Massachusetts has relatively few uninsured drivers compared to many states, but many Massachusetts drivers buy only minimum required amounts for Bodily Injury to Others. 

You may purchase both Uninsured Auto coverage and Underinsured Auto for coverage up to, but no more than, the limits of the Bodily Injury to Others coverage you carry. In general, it makes sense to purchase as much Un/Underinsured motorist coverage—which protects you—as you purchase of coverage that protects others. 

Your Un/Underinsured coverages will not pay for damage to property. 

How Premiums Are Set 

The company you choose and the coverage types and levels you select determine your premiums—but so do various facts about you and the vehicles you drive. Some facts are beyond your control; but others you can change, and in doing so substantially influence your insurance premiums. 

Your Driving Record 

Your driving record is very important. Industry data indicate that an individual who has had two accidents in the past two years is almost two-and-a-half times more likely to have an accident in the coming year than someone who has had no accidents. Similarly, the accident rate for individuals with two traffic convictions during a three-year period is twice as high as the rate for drivers with no convictions. 

It will come as no surprise, then, that driving records have a big impact on premiums. 

Insurance companies can set rates using either the state’s old Safe Driver Insurance Plan (SDIP) or their own “merit-based” systems (which must be approved by the state) to evaluate drivers based on their driving records. Within both systems, drivers who have not caused an accident or had traffic violations in the previous five or six years pay the lowest auto-insurance rates; those who have caused accidents or had traffic violations pay higher rates. 

It is difficult to predict exactly how one speeding ticket or one accident will affect your premiums. But we estimate that even one speeding ticket in the last five years increases premiums by, on average, about 18 percent. Two speeding tickets produce even larger bumps—an additional 60 percent per year. 

Accidents can be even more costly than tickets. We estimate that having one at-fault accident in the last three years will cost most drivers an extra 50 percent in premiums, and two at-fault accidents will more than double most drivers’ annual premiums. 

Most companies consider the driving records of everyone driving your car or cars. Therefore, if you have a perfect driving record but your spouse has had violations or accidents, you may not qualify for the companies’ best rates. 

Fortunately, insurance companies can’t hold recent accidents or tickets against you forever. Both the state’s formula and the insurance companies’ own systems for determining how much to penalize drivers for accidents or tickets incorporate a merit-based rating system that rewards safe driving and cancels penalties for previous accidents and tickets if a policyholder is accident- or ticket-free for a period of years. 

Your Experience and Training as a Driver 

Driving experience is strongly related to the likelihood of having accidents and claims—and has a big effect on rates. 

In Massachusetts, insurers can’t use the age of drivers to set rates, but they can charge higher rates for inexperienced drivers. Companies usually classify drivers according to three length-of-experience levels: inexperienced drivers licensed less than three years; inexperienced drivers licensed three or more but less than six years; and experienced drivers, licensed six or more years. Inexperienced drivers are further classified according to whether they are a vehicle’s principal operator or only an occasional operator. 

A principal operator with four years of driving experience can usually expect to pay roughly double the rate of an experienced operator. A principal operator with only one year of driving experience will usually be charged more than three times the rate of an experienced driver. While having an inexperienced driver on your policy as an occasional driver usually doesn’t cause such a large differential, it still dramatically increases the total premium. 

Message to parents: Have your kids take driver training. Most companies offer discounts—typically 10 percent—for inexperienced drivers who have completed an approved driver training course. Message to kids: Get your license while your parents are paying the higher inexperienced driver rates.  

Where You Live

As our price comparisons show, insurance premiums are greatly affected by where policyholders live. In our comparisons, policyholders living in Lexington pay hundreds of dollars more per year than their South Boston neighbors. 

Type of Car You Drive 

You probably won’t buy a car based on insurance costs, but the differences among cars are often substantial: It costs $200 or more per year extra to insure some cars than others. 

Keeping an old car, or buying used, can also substantially affect your premiums. For example, premiums on a seven-year-old car are usually about 12 percent lower than on a five-year-old car. As mentioned above, you’ll also save by driving an older vehicle if you drop collision coverage, since the loss of an older car will probably not be a financial catastrophe. 

Your insurance premiums also slightly decrease if your car is equipped with safety devices or anti-theft features. Companies must offer a 25 percent discount on PIP, Medical Payments, and Uninsured/Underinsured Motorist coverages for cars with passive restraint systems (air bags or automatic seatbelts). If your vehicle has anti-theft devices, your company must discount your comprehensive coverage by five to 36 percent, depending on the type of device. Your insurance company or agent can provide a list of qualifying anti-theft devices and corresponding discounts. 

Big Breaks for Seniors 

You can’t control your age, but if you are age 65 or older you can at least make sure your premium reflects an important discount. All insurers must offer policyholders age 65 or older a 25 percent discount off their total premium if there are no inexperienced drivers on the policy and their cars are not customarily used for business purposes. 

How Much You Drive 

If you drive your car 5,000 miles a year or less, companies must cut your premium by 10 percent (except on the portion of the premium for comprehensive, substitute transportation, and labor and towing coverages). Most companies also offer small discounts if you drive between 5,001 and 7,500 miles. 

Length of Time Insured by the Company 

If you are considering switching insurance companies, and have been “loss free” with your current company for a while, calculate in any future longevity discounts. Many companies offer renewal discounts each year. Some offer five to 10 percent discounts for three years of coverage without an at-fault accident, and may increase the discount at six years and nine years. 

Dual-Policy Deals 

Most companies offer multi-car discounts for insuring one or more cars with them. Discounts vary, but 30 percent for both cars is typical. 

Many insurance companies also offer lower rates if you insure both your car and your home with them. Some knock off five percent, 10 percent, or even more from either the auto rate or the homeowners rate; some knock off a percentage from both. From a consumer’s point of view, this dual-policy pricing is an undesirable practice because it makes shopping more difficult; to find out the exact savings you could realize by switching companies, you have to shop for both types of coverage at once. 

Other Discounts 

Several insurers offer five to 15 percent discounts to groups—employees of specific companies and members of employee associations, alumni associations, and others. Check the Division of Insurance website at for the list of these groups. Several groups whose members can get 10 percent discounts are open to anyone. 

Even with a 10 percent group discount, companies that offer these discounts rarely beat the lowest priced companies shown in our price comparisons. But checking on available group discounts might lead you to an insurance company that you would prefer for service or other reasons, but would be unacceptably expensive without a group discount. 

If you regularly use mass transit, some companies offer a 10 percent discount on property damage and collision coverages if you provide evidence that you purchased at least 11 months of commuter passes. 

Some companies also give discounts for inexperienced drivers who are full-time students and have good grades (typically, a B average or better). If your policy includes a student who lives at least 100 miles away at school, without a car, some insurance companies offer a considerable price cut. 

Identifying the Best Companies 

There are two main considerations in choosing among auto insurance companies: amount of premiums and quality of service. But also consider a company’s record on terminating policyholders, its financial stability, and a few other factors. 

Shopping for Low Premiums 

Our price comparisons show annual premiums for auto insurers writing new policies in Massachusetts. The state’s Division of Insurance of the Office of Consumer Affairs & Business Regulation maintains an online database of companies’ current rates for several sample profiles. Our price comparisons report the premiums for standard coverage for four profiles in eight Boston area locations. 

As our price comparisons indicate, company-to-company rate differences are dramatic—hundreds of dollars a year for every case, and more than $1,000 for many cases. 

The rates in our price comparisons will probably not apply exactly to you; most drivers will differ in location of residence, vehicle usage, vehicle type, or other ways. But the rates provide a good starting point for shopping. Companies with low rates are good prospects. 

You can focus in even more tightly on your best prospects by using the state’s rate-comparison website ( Select a profile close to your own in terms of driver experience, driving record, and other variables, and use it to obtain premiums for the available companies. 

Once you have identified a few prospective companies, begin shopping on the Web; many company websites will provide quotes. Or use the websites to locate agents. Then ask each agent to quote a price for the coverage you want. Before shopping, make a list of the coverages you plan to purchase. 

Independent agents who sell policies offered by many companies can provide quotes from various companies. But policies from some companies are not available through independent brokers or agents; to get these companies’ rates—which often are the lowest available—you have to obtain a quote from a company website or contact company agents directly. 

When contacting agents, you may have to push hard to obtain reliable information. When we researched our article on homeowners insurance, we found that many insurance agents were unable to provide accurate price quotes and that some could not correctly answer even the most basic questions about coverages. For auto insurance, we find that most agents can quote accurate rates, but problems still exist. Some agents quote wildly inaccurate rates, while others persistently push more coverage than requested. 

In addition to seeking out companies based on their relative rankings in our price comparisons, you might consider using an insurance comparison website, such as,, or But because these sites provide rates only from companies with which they have business relationships, the lowest cost companies for you may not be included in reports the sites generate. 

Most insurance companies write auto policies by assigning prospective customers to tiers determined by their driving and credit records. When dealing with agents, make sure you ask whether you qualify for the best rates companies offer, and, if not, why you don’t. 

If you have so many accidents or violations that it is difficult for you to qualify for coverage, you are entitled to buy insurance through your state’s assigned risk plan. Rates in the assigned risk plan are often triple or more what you’d pay for a “preferred” policy. 

Shopping for Service 

Consider price in relation to the quality of service companies provide, especially their claims-handling service. Our Ratings Tables, for the largest insurers in the area, provides three types of information about service: a survey of policyholders, a survey of auto body shops, and an analysis of complaints. 

Our Survey of Policyholders 

We asked area consumers (primarily CHECKBOOK and Consumer Reports subscribers) who had recently made auto insurance claims to rate their companies “inferior,” “adequate,” or “superior” for “simplicity of claim procedures,” “adequacy of claim payment,” and other elements of service. Our Ratings Tables show what percentage of policyholders rated each company “superior” on each element. (For a further description of our policyholder survey and how its results and our other research results should be interpreted, click here.) 

Our Ratings Tables show big differences in how customers rated companies. For example, at the time of our last full, published report, Amica was rated “superior” for “speed of claim payment” by 90 percent of its surveyed customers. In contrast, Metropolitan received “superior” ratings from only 51 percent. 

Asking the Experts: Auto Body Shops 

We also asked area auto body shops to rate the insurers “poor,” “fair,” “good,” “very good,” or “excellent” on “treating their customers (car owners) fairly.” Our Ratings Tables show the percent of surveyed shops that rated each company “good,” “very good,” or “excellent,” and the number of ratings each company received. 

Surveyed shops gave high marks to Amica, Arbella, Norfolk & Dedham, Plymouth Rock, Quincy Mutual, Safety, and USAA—they all received favorable ratings from at least 80 percent of shops. Allstate, GEICO, Liberty Mutual, Occidental, and Progressive were rated lowest, receiving favorable ratings from fewer than 45 percent of the shops. 


Another way to assess quality is to look at the number of complaints filed against each company with state insurance departments, compared to its volume of business. While policyholders might rate a company less than “superior” if its deficiencies are minor, filing a formal complaint with a government regulatory agency presumably reflects serious dissatisfaction. 

Our Ratings Tables report the number of private passenger auto insurance complaints filed in 2010, 2011, and 2012 with the Massachusetts Division of Insurance plus a “complaint rate” for each company. The complaint rate takes into account the fact that companies that do much more business than others are likely to incur more complaints. It is calculated as a company’s number of complaints per $10 million in private passenger auto insurance premiums written. 

Checking For Solvency 

While shopping, pay attention to news about a company’s financial instability. Don’t sign on with a company that may soon have to cut many policyholders or raise prices sharply to stay alive. Also avoid companies that may go out of business soon, forcing you to begin shopping again. 

On the other hand, there is little reason to worry about insurer stability. If a company goes bankrupt, policyholders may have to wait to recover money owed them but generally are protected from major losses. A special “insolvency guaranty fund” in every state has the duty to assess all insurers doing business in the state on a pro rata basis and pay off outstanding claims of insolvent companies and refund each policyholder’s paid-in premium. 

What If No One Will Insure You? 

Some individuals—usually the young and those with records of accidents or violations—find it difficult to locate a company to insure them. 

If you are one of these “high-risk” individuals, the only solution is to shop. Try several of the insurance companies to see if they will cover you. As a last resort, you can sign up for insurance through the Massachusetts Automobile Insurance Plan (MAIP), Massachusetts’ “assigned risk” plan. MAIP is open to licensed drivers who can’t get coverage through the regular market, or who can’t get coverage at rates that do not exceed MAIP’s. An agent contacts the plan on the driver’s behalf, and drivers are then assigned to regular insurance companies. Each company is assigned a pro rata share of policyholders according to its share of business in the state, and the policyholder pays the same premium at whatever company he or she is assigned to. 

Don’t assume that once you have been turned down by a preferred company you must turn to a high-risk company or the assigned risk plan. Companies’ standards for accepting new policyholders vary widely and change constantly as their rates and volume of business change. To enhance your chances, remind agents that you or members of your family have other business with their company—for instance, a homeowner’s policy or automobile policies for other drivers. On the other hand, don’t stop shopping even after you are accepted by a preferred company. High-risk companies or the assigned risk plan sometimes offer better rates. If you must join the assigned risk plan at a very high price, look for other coverage after a year. 

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