Higher Coverage, Higher Costs:
How Massachusetts’ New Auto Insurance Law Impacts You

Mandatory Minimum Coverage Limits 

A few months ago, we reached out to provide information to help you understand the various automobile insurance coverages available under most policies. You can read that article here. Today, we’re here to inform you about new legislation that recently took effect, increasing Massachusetts’ mandatory minimum automobile insurance coverage limits. In this email, we’ll briefly break down the changes, explain why they matter, and share what simple steps you can take to potentially safeguard your financial future and better protect yourself and your family from the unexpected.*

What’s Changing

Effective July 1, 2025, the Commonwealth raised the mandatory minimum auto insurance coverage limits for the first time since 1988.  The purpose of this change was to modernize Massachusetts’ auto insurance requirements to better protect drivers like you in an era of rising medical costs and vehicle repair expenses.

For nearly the last four decades, all registered vehicles in Massachusetts were required to carry compulsory insurance covering bodily injury to others ($20,000 per person/$40,000 per accident), property damage ($5,000), and personal injury protection (PIP) for medical expenses and lost wages up to $8,000 per person.  These limits have long been criticized as inadequate. A collision today can easily exceed $5,000 in repairs, and serious injuries can often lead to tens of thousands in medical bills. New legislation signed into law last year, however, updated minimums for all policies written or renewed on or after July 1, 2025.

The key increases are as follows:

• Bodily Injury Liability (“BI”): Now $25,000 per person and $50,000 per accident (up from $20,000/$40,000). If you’re found to be the at-fault party in a car collision, the Bodily Injury Liability coverage typically covers injuries you cause to other drivers or passengers, including medical treatment, lost wages, pain and suffering, and the like.
• Property Damage Liability: Boosted to $30,000 (from just $5,000). This pays for repairs to another person’s vehicle or property (e.g., fence, lawn, or house) if you’re the at-fault driver.
• Personal Injury Protection (PIP): Remains at $8,000 but is now more explicitly tied to these higher thresholds, ensuring no-fault coverage for your own medical needs regardless of fault.  Additionally, uninsured/underinsured motorist coverage will align with these new limits, offering better protection if you’re hit by a driver with insufficient insurance.

How it Affects You

Let’s start with the bad news: you should expect your car insurance rates to increase. The average cost for minimum coverage is expected to rise by about 36%. The good news, however, is that these new limits offer you more protection if you’re in a crash.

Consider a real-world scenario: You’re in an accident and you’re determined to be the at-fault driver. The other driver’s medical bills are roughly $30,000. With the old minimum coverage limits, your insurance would likely cover only $20,000, leaving you to foot $10,000 out of pocket. Now, with the minimum bodily injury coverage limits at $25,000 per person, you’re only liable for $5,000.

 

Or, let’s say you’re stopped at a red light when a distracted driver plows into the rear of your vehicle. You suffer injuries requiring $25,000 in medical expenses, plus $30,000 in car repairs. Under the old minimum coverage limits, the at-fault driver’s $20,000 Bodily Injury/$5,000 Property Damage policy would fail to compensate you for your full costs. Now, with $25,000 Bodily Injury/$30,000 Property Damage minimums, the other driver must carry enough coverage to cover most of your expenses in the above hypothetical, upfront, saving you a lot of time and financial headaches.

What Can I Do to Better Protect Myself

1. Check Your Policy. You should make sure that you know and understand your automobile insurance coverage. Start by reaching out to your insurance broker and ask for your coverage selections page, which is a document outlining the types and amounts of insurance coverage you have. Your policy should automatically update to reflect the new minimum coverage limits when it is renewed by your carrier; however, it does not hurt to check yourself.
2. Plan for Increased Insurance Rates. The increased minimum coverage limits will likely result in higher insurance premiums. Some estimate that minimum insurance costs will increase by 36%. Factor that cost into your budget so you’re not caught off guard.
3. Consider Increasing Your Coverage. Next, you should consider whether your coverage limits are adequate. The minimum coverage limits are just that—the minimum.  Ask your insurance broker what options are available for you to increase your coverage. While no one expects to be involved in a car collision, if the unexpected happens, you would rather be overprepared than unprotected. Medical bills and vehicle repairs are more expensive than ever. If you happen to be involved in a severe accident, minimum coverage limits may not be enough to cover medical expenses for major injuries or damage to high-value vehicles. Purchasing higher coverage limits may help you protect your savings, home, and your financial well-being.

A couple of additional words to the wise…

Make sure your car is “garaged” at the address shown on your insurance policy. If you have moved, or the car is kept in a different location than is listed on your policy, and you do not tell your insurance company, the insurance company can deny coverage if you are in an accident. Next, make sure anyone who regularly drives your car is named as an insured on your policy. If you don’t, and they are involved in a collision, your insurer may deny all or a portion of your claims.

 

While the recent increase to Massachusetts’ minimum insurance coverage requirements offers drivers like you with more protection on the road, reviewing and adjusting your coverages now can help make sure you are in the best possible position when or if you are involved in a collision. Your insurance broker can help you determine the types and levels of coverage you need. If you are in a collision, Bacon Wilson can help you navigate this complex process and make sure you receive full and fair compensation for your injuries.

 

If you cause a collision and need help understanding your insurance coverage or need help dealing with your insurer, we can help with that as well.

*The foregoing was presented for information purposes only, is not legal advice, and does not create an attorney-client relationship.

The information in this article was provided by Attorney Conor P. Carey from our Northampton Office. Attorney Carey is an active member of the Hampshire County Bar Association and the Hampden County Bar Association. He is licensed to practice law in the state of Massachusetts and Minnesota.