Car insurance for Massachusetts will soon be managed with the competition system instead of the old fixed and established system. This means that instead of the state setting the rate of car insurance, it is now the auto insurance companies. Before, all car insurance companies basically had the same rate for each category. Now, it is the car insurance providers which set the rate. For the consumers, this means they can now shop around for the best rate for their car insurance. And since the market is more competitive now, the consumers are given even lower rates to choose from.

How does this new system work ?

Well for starters the insurance commissioner will give the insurance companies the regulations for auto insurance. The regulation will then be used by the insurance companies as their aid in considering the factors that affect the rate of insurance, such as the driving records of the drivers. After a year, a review of the system will be conducted by the commissioner to improve the system. Once the insurance companies are provided with the regulations, the system will gradually be implemented.

Whatever changes that will soon take place, the State of Massachusetts has a compulsory coverage requirement. This means that all vehicles registered in the state must have a required minimum amount of car insurance. You cannot register your vehicle without buying insurance because the Massachusetts Registry of Motor Vehicles will require your application for registration to be stamped by your auto insurance company. If it is not stamped, you cannot register. Driving with out car insurance for Massachusetts is also illegal and if you are caught driving without insurance, you will have to pay the fine and your license may be suspended.

The minimum requirement for car insurance in Massachusetts is $20,000 for bodily injury coverage for one person per accident; $40,000 bodily injury coverage per accident for two or more people; $5,000 for property damage; and $8,000 for personal injury protection.