Massachusetts will implement its first enhance in necessary auto insurance coverage minimums since 1988, subsequent July
Governor Maura Healey signed laws on December 23, 2024, elevating the minimal bodily damage legal responsibility protection to $25,000 per particular person and $50,000 per accident from the present $20,000/$40,000 necessities. Property injury minimums will enhance sixfold to $30,000 from the present $5,000. The adjustments take impact July 1, 2025.
The laws, nonetheless, leaves the opposite necessary coverages: Uninsured motorist bodily damage protection at $20,000/$40,000 and private damage safety at $8,000 per particular person per accident.
Whereas substantial, the bodily damage and property injury restrict updates nonetheless fall in need of maintaining tempo with practically 4 many years of inflation. Boston has skilled a cumulative worth enhance of 170.94% between 1988 and 2024, with a mean annual inflation fee of two.81%. Thus, the 1988 bodily damage minimal of $20,000 would equate to roughly $54,200 in the present day, making the brand new $25,000 requirement lower than half of inflation-adjusted safety. Nonetheless, the 1988 property injury minimal of $5,000 would equal roughly $13,550 in the present day. This new $30,000 minimal property injury exceeds this inflation-adjusted determine by a large margin, making it extra in tune with automobile restore prices in the present day.
The brand new minimal bodily damage limits appear inadequate in comparison with trendy medical prices and legal responsibility exposures, particularly contemplating the rising prices of medical remedy and prolonged care.
Insurers have roughly six months to implement these adjustments for insurance policies issued or renewed after July 1, 2025. This may increasingly require swift motion to replace kinds, alter score fashions, and talk adjustments to policyholders.
