When is the last time that you reviewed your car insurance policy?  If you are like most people, the answer is when you first obtained the policy or perhaps never.  This can mean big headaches if you are ever in a car accident, even a car accident that is someone else’s fault.

When looking for car insurance, people are often focused on keeping the premium as low as possible.  Unfortunately, you get what you pay for.

Make it your New Year’s resolution to pull out your car insurance policy, and contact your insurance agent to make any necessary changes.

Here are issues to consider in getting the right coverage for car insurance in Massachusetts:

The standard auto policy consists of two parts – compulsory coverage and optional coverage.

You are legally required to have compulsory coverage.  This includes Bodily Injury coverage, which is available to pay someone who is injured as a result of a car accident that is your fault.  The required coverage amount in Massachusetts is $20,000 per person, $40,000 per accident.  In this day, that coverage amount is dangerously low.  It does not take much for a creative plaintiff’s attorney (like Beauregard, Burke & Franco) to look for recovery beyond $20,000 in a serious car accident case.  You would be personally liable for damages beyond $20,000.  You can increase your coverage by obtaining Optional Bodily Injury coverage.  I suggest that you get Optional Bodily Injury coverage of at least $100,000.  If you have substantial assets, you should get coverage that is sufficient to protect your assets.

Compulsory coverage also includes Personal Injury Protection benefits, commonly known as PIP.  This pays for the medical bills and lost wages of you or anyone in your car, regardless of fault.  The required coverage amount is $8,000.  If you are operating a motorcycle at the time of an accident, PIP benefits are not available.  Car insurers hate motorcycles because of their perception of risk.  If you own a motorcycle, you should get optional Medical Payments coverage.  Medical Payments coverage will pay your medical bills up to the requested coverage amount, typically $5,000.  If you do not have health insurance, you too should consider getting Medical Payments coverage.

The third part of compulsory coverage is Uninsured coverage.  This coverage is available if you are hit by a car that is uninsured for whatever reason, including a hit and run accident.  This coverage protects you and should not be ignored.  The required coverage amount is $20,000.  But, I suggest Uninsured coverage of at least $100,000.

The last part of compulsory coverage is Property coverage.  This coverage is available to pay someone whose property is damaged as a result of a car accident that is your fault.  The property damage could be the value of someone’s totaled car or the cost of repairing the damage done to someone’s building.  The required coverage amount is $5,000.  But, I suggest Property coverage of at least $50,000, preferably $100,000.

In addition to the above, you may choose to purchase different forms of optional coverage.  This includes Optional Bodily Injury coverage, Medical Payments coverage, Collision coverage, Comprehensive coverage, Substitute Transportation coverage, Towing and Labor coverage, and Underinsured coverage.

Optional Bodily Injury coverage was discussed above.  It increases the coverage that is available to pay someone who is injured as a result of a car accident that is your fault.  In addition, Optional Bodily Injury coverage applies to some situations that are not covered by compulsory Bodily Injury coverage.  For example, it pays for injuries to guest occupants in your car, accidents outside of Massachusetts, and accidents in a place to which the public has no right of access.  You should always elect to have Optional Bodily Injury coverage.  I suggest Optional Bodily Injury coverage of at least $100,000.  If you have substantial assets, you should get coverage that is sufficient to protect your assets.

Medical Payments coverage was discussed above.

Collision coverage pays for physical damage to your car, less a deductible selected by you.  Collision coverage applies regardless of fault.  You should have Collision coverage, unless your car is an older model that is not worth repairing.  Your deductible is set at $500 unless you select a different amount.  In deciding on the deductible amount, you should balance the impact on your premium with your ability to pay for unexpected expenses.  Most banks require that you have Collision coverage for a car loan.

Comprehensive coverage pays for physical damage to your car as a result of something other than a collision, such as fire, theft, vandalism, damage by windstorm, contact with a bird or animal, etc., less a deductible selected by you.  Like Collision coverage, you should have Comprehensive coverage, unless your car is an older model that is not worth repairing.  Your deductible is set at $500 unless you select a different amount.  Some forms of loss are not subject to the deductible, such as broken glass.  Most banks require that you have Comprehensive coverage for a car loan.

Substitute Transportation coverage pays for a car rental in the event of a loss.  Towing and Labor coverage pays for towing expense in the event of a loss.  You can skip these coverages if you are comfortable with paying for unexpected expenses like a car rental or a tow.

Underinsured coverage is the least understood form of coverage, but perhaps one of the most important.  I have handled far too many cases where I have had to tell clients that, despite their catastrophic injuries, I can only get them $20,000 because the other driver had a minimum policy and little or no personal assets.  Underinsured coverage protects you in that type of situation.  Underinsured coverage boosts the coverage that is available to pay for your bodily injuries.  I suggest Underinsured coverage of at least $100,000.  If you are hit by a driver with a $20,000 policy, and you have $100,000 in Underinsured coverage, then you are covered for your bodily injuries up to $100,000.

One final note – if you are a high earning individual, you should opt for the maximum policy limits and consider a $1 Million umbrella policy.  The cost of a $1 Million umbrella is less than you would think.  An umbrella policy also extends the coverage under your homeowner’s policy.

Do not let the happening of a car accident be the first time that you review your car insurance policy.  Do yourself a favor and review your policy with your insurance agent in 2014.

Beauregard, Burke & Franco handles insurance coverage issues of all kinds.  We regularly handle serious accident cases for clients who have been killed or hurt by the negligence of others.