Massachusetts Insurance Rates - SDIP
Insurance Surcharges: Massachusetts has a Safe Driver Insurance Plan (SDIP), a program mandated by state law which is supposed to reward good drivers by keeping their rates low and punish high risk drivers by making them pay a greater share of all insurance costs. The SDIP premium adjustment is calculated after all other discounts and rating factors are applied. Four coverages -- three compulsory and one optional -- may be raised or lowered under SDIP:
- Bodily Injury to Others,
- Personal Injury Protection,
- Damage to Someone Else's Property
The Statement uses reference points or steps, to translate your driving record into a numerical measure that determines whether you merit a credit or must pay a surcharge.
Here's how it works:
Step 15, is the starting or neutral step. Each step above or below Step 15 has a 7 percent effect on the three compulsory rates and collision premiums.
Each year of incident-free driving normally earns a credit point. Step 9 is the lowest possible step, it represents a 42% decrease in the relevant insurance costs. meaning that the lowest Step you can reach is 9. This would produce a 42 percent savings in each of the three compulsory coverages linked to SDIP, and collision.
Accidents and traffic violations can produce surcharge points that stay on your record for six years and show up on your Statement for five years. Surcharges are 2 points for a minor traffic violation, 3 points for a minor at-fault accident and 4 points for a major at-fault accident. A major at fault accident is considered one with a claim over $2,000. For a major traffic violation, such as drunk driving or operating to endanger (also known as reckless driving), the surcharge is five points. These events generate a Surcharge Notice from your insurer.
Make sure you understand how your particular insurance situation might be affected by SDIP points.
The SDIP program is run by the state's Merit Rating Board. You can appeal a Surcharge Notice to the Board of Appeal Division of Insurance. You may have a lawyer represent you. You should be aware the the findings of the board can be used in related lawsuits such as a personal injury claim. If you need a lawyer please contact me here.
The Clean State Rule: Even if you have a bad history, three consecutive years of incident-free driving will set your SDIP step at 14. This is a situation where one minor traffic ticket could result in many thousands of dollars of additional insurance costs if it prevents you from getting a clean slate.