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Accidents, Surcharges, Appeals and Your Auto Policy

Accidents, Surcharges, Appeals and Your Auto Policy

In general, if you are in an auto accident in MA where damages paid by the company exceed $1,000 and you are deemed 50% or more at fault you will be surcharged. Companies are required by law to surcharge drivers. A surcharge is a notification sent by the company to the state’s Merit Rating Board. Surcharges can also be applied for speeding tickets and other violations.

Your Safe Driving Insurance Plan, commonly referred to as your SDIP or “step” or “points”, is a number assigned to each driver that includes a driver’s surcharges over the last six years. 99 is the best SDIP (no incidents in last six years), then 98 (no incidents in last five years), then 00, 01, 02 and up. A minor accident (damage exceeds $1,000) is 3 points while a major accident (damage exceeds $5,000) is 4 points.

When your auto policy renews, the company retrieves your latest SDIP from the RMV and applies any new surcharges that have occurred in the last year to your renewal premium. Minor and major accidents can cost an insured thousands of dollars over a six year period (since that is how long an accident will affect your SDIP).

In some cases, you may decide to appeal a surcharge to avoid the associated cost on your insurance policy. In order to appeal you must do so within 30 days of the mailing date of the surcharge notice, with few to no exceptions. If you plan on appealing a surcharge, you must be diligent about making sure you obtain your surcharge notice in the mail. You may even want to contact the company to ask when the surcharge will be mailed. Appealing a surcharge involves completing the back side of your surcharge notice explaining why you believe you are less than 50% at fault and mailing to the Division of Insurance along with a non-refundable check for $50. You will then receive a post card notifying you of your appeal date. You must show up in person on your appeal date to state your case.

Many companies are now offering accident forgiveness which may allow the insurer to “forgive” one accident on the policy, therefore saving you thousands of dollars. Each company has specific conditions that must be met in order for the forgiveness to apply. In most cases, you are eligible for accident forgiveness if you are a 99 or 98 and you purchase the coverage in advance of the accident.  Please contacts us to see if you are eligible to add this endorsement to your policy, if it is not already included.

Note the above may not apply to all claims or in all circumstances.