Looking Up – Bare Minimum Coverages Increase

by Alana Quartuccio

The insurance world can really be a cruel and unfair game. No matter how it’s played, the consumer almost always loses.

Of course, it is a game of loss – insurance is a means of protection from financial loss, in which for a fee, a party agrees to compensate another party in the event of a certain loss, damage or injury – but consumers are all too often saddled with disadvantages. 

So any win in favor of consumers is surely a step in the right direction toward playing fairly. 

Massachusetts has a new law going into effect on July 1, 2025 that will bring some long overdue changes to automotive insurance policies – increasing bare minimum coverages for bodily injury (if you hurt someone else in an accident) from $20,000 to $25,000 per person and from $40,000 to $50,000 per accident and increasing uninsured motorist coverage (if someone hurts you and they don’t have insurance) from $20,000 to $25,000 per person and from $40,000 to $50,000 per accident. The largest increase of all – which will benefit vehicle owners and collision repairers – is for property damage (if you damage someone else’s car, house, storefront window or other property) from $5,000 to $30,000 per accident. 

It had been decades since any changes were made to these bare minimums – in fact, the property damage limit had not been changed since 1975. Back then, $5,000 for property damage was likely sufficient enough to cover the entire cost of a vehicle, but it barely scratches the surface of what that amounts to in 2025!

One of the driving forces behind seeing these changes come to fruition was the Massachusetts Association of Insurance Agents (MAIA), which represents 900 independent insurance agencies employing thousands across the state. According to Nick Fyntrilakis, president and CEO of the organization, this has been on their legislative docket for at least 10 years.

“It surfaced as an issue because our agents would run into situations where – not their clients per se, because clients of independent agents are typically going to have adequate protections because they are going to get the guidance of an independent agent to make sure they have sufficient coverage – but their insureds, unfortunately, may have had an accident with someone without sufficient coverage. They recognized it wasn’t an appropriate level of protection or limit, so they felt this needed to be addressed,” he explained. “Agents were supportive, recognizing that it’s important to ensure everyone has an adequate level of minimum coverage that is reasonable.” 

For far too long, motorists whose cars have been hit by drivers with inadequate property damage coverage have been victims of an entirely different kind of hit. 

Case in point – Dana Snowdale (D&S Autoworks; Abington) shares his son’s experience after another driver t-boned his new car: 

“Sometimes no amount of caution can shield you from someone else’s mistake. He barely had time to react as a car barreled through a stop sign and slammed into his vehicle. Thankfully, he was unharmed. The other driver, a woman, who seemed genuinely apologetic, admitted fault at the scene. Although he was shaken, he felt a measure of relief knowing that her insurance would cover the damages. After all, that’s how the system was supposed to work – or so he thought. When he filed a claim with the other driver’s insurance company, everything seemed to go smoothly at first. The company accepted the appraisal from my shop. Parts were ordered, and repairs began. For a moment, it seemed like the ordeal would soon be behind him. But then came the phone call. The insurance company, in a tone that teetered between apologetic and dismissive, informed the shop that there was an issue. Apparently, the woman’s liability coverage was insufficient to cover the total cost of the repairs. Despite initially agreeing to pay the claim in full, the company now claimed they couldn’t honor their promise. The remaining balance? That would be my son’s problem.” 

Despite being told there was “nothing they could do,” Snowdale believed it was a breach of contract and filed a 93A complaint against the insurance company, citing unfair and deceptive practices. 

Snowdale says it shouldn’t have been something his son would have to fight for. “It would have been a different story if they said the other driver had limited liability up front.” In the end, the insurance company came around and settled, paying the full amount of the appraisal. The whole situation taught Snowdale a big lesson: “That was the first time I was aware of limits as low as $5,000.” 

Jumping from $5,000 to $30,000 is certainly a significant change, and definitely a step in the right direction,” Fyntrilakis says. “It’s certainly better than what it was.” It also brings Massachusetts in line with other states. Prior to the changes, the Commonwealth was “at the bottom of the barrel in regard to these minimum limits. These changes are on par with many other states.” 

How much coverage is enough really depends on the incident. These days, a fender bender can amount to $5,000, so the $30,000 minimum at least gives better protection, he stated. Another consideration is that the property damage coverage applies to all the vehicles involved in the accident, so if a driver with minimum property damage coverage damages more than one vehicle, that amount is split up. 

“Let’s say there are cars legally parked in a private lot, a driver comes along and smashes into two cars, and that driver as of July 1 will have $30,000 in property damage coverage,” explains Nadine Nesbitt of the AxiA Group, an independent insurance agency. “Let’s say one of the cars has $20,000 worth of damage, and the other has $10,000 of damage. That would be easy to divide up, but what if each vehicle has $40,000 of damage? They’re going to split that $30,000 between each vehicle because it’s only going to pay for a share of the damage to each one.” 

Consumers who have had more property damage and bodily injury limits higher than the minimum need not worry about increased costs, but this could bring changes to those who need to meet the new normal. 

In most cases, insurance agents upsell from the bare minimum. 

According to Fyntrilakis, “The numbers we calculated indicate that about 12 percent of the drivers have these minimum limits. This will really target those who had bare minimum coverage to make sure they have more adequate coverage.” He reports that agents in MAIA are more likely “to put $50,000 or more in front of their clients. They wouldn’t entertain the low number.” 

Nesbitt agrees that most agencies offer higher coverage and that in fact, “You should offer customers many choices, but some customers don’t want many choices. They just want you to tell them what you think, and then they make a choice. Some agencies suggest coverage starting at $250,000 per person/ $500,000 per accident and $250,000 for property damage, so it really depends on what the agency’s owners tell the employees to do.”

As for what the additional cost will mean for insureds who do have to meet the new norm, it will depend on a lot of factors, explains Fyntrilakis. “There are so many different factors that drive a consumer’s cost of coverage. All things being equal for an established driver with a good driving record, this would be a negligible increase. A driver with poor driving history and inexperience, this will definitely be more impactful.”

“Personally, I’ve always suggested the higher limits and explained and taught the coverage is based on the higher limits,” Nesbitt shares. “And then if somebody said they wanted lower limits, I’d quote them, but oftentimes, lower limits cost more than higher limits in the long run. Some companies charge less if you buy better coverage, so it never made any sense to me for the short term to offer lower coverage because, even if it wasn’t less expensive for better coverage, it was very similar in price.”

Like Snowdale indicated, shops deal with third-party claims all the time and therefore need to be aware of these forthcoming changes, which hopefully will amount to less issues for their customers when involved in an accident caused by someone with low property damage coverage.

Nesbitt says body shops tend to take on the role of counselor to their customers in many cases, listening to their stories about how they got into an accident, and often have to inform them when they learn the party who hit their vehicle had insufficient coverage. 

“If a shop owner finds out that the other party’s insurance policy only has $5,000 in property damage coverage and knows it’s going to cost $12,000 to fix the car, it’s their hard luck responsibility to tell the customer they are going to fix their car properly because they care about their safety but that it is going to be up to them to come up with the additional cost because the other person’s insurance will only pay $5,000 and they need to pay the difference.”  Fyntrilakis points out that “a not-at-fault driver who has adequate coverage would likely not have to pay out of pocket; their insurance company would step in and make them whole.”

Costs to repair vehicles have gone up exponentially over the years, so these bare minimum increases should be a benefit to all – including the collision repair shops who hopefully won’t see as many incidents like this in the future, Nesbitt predicts. 

Want more? Check out the May 2025 issue of New England Automotive Report!