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Insurance Surcharges

What You Need to Understand About Massachusetts Insurance Surcharges

The Safe Driver Insurance Plan, or SDIP, is a program that is intended to reduce the costs of insurance for good drivers and to increase the rates on higher risk drivers. This includes speeders, those who are in accidents, or are cited for assorted traffic violations.

Under SDIP, four coverages can be increased or decreased:

  • Bodily Injury to Others
  • Personal Injury Protection
  • Damage to Someone Else’s Property
  • Collision

If your insurance is increased under SDIP for one of these coverages, hiring a good attorney can help you to reverse these higher costs.

You can see any SDIP credits or surcharges that you receive in the SDIP statement that should be given to you by your insurer. The SDIP statement will use reference points/steps to illustrate your driving record in a numerical measure that will dictate whether you should get a credit or surcharge.

Every driver starts at Step 15, and this has no effect on your premium. But every step that is above or below Step 15 will have an effect of 7% on the three of the coverages above, and a 5% effect on collision.

Every year that you drive without an incident, you earn 1 point of credit. The most that you can get is 6, which means that the lowest Step you can have is 9. This would give you a savings of 42% in three of the coverages above, and a reduction of 30% in collision. Remember that any accidents or traffic violations can give you surcharges that will remain on your record for six years, and they will show up in this statement for five years.

Surcharge amounts also include 2 points for any traffic violation, 3 points for an at-fault accident that is minor, and 4 points for an at-fault accident that is major. If the accident is over $2,000 in damages, it is major. Also, for a major charge such as driving drunk, you get a surcharge of five points. The events below will get you a surcharge notice from your insurer.

Incident Surcharge Points
“Minor” Traffic Law Violation such as speeding 2
Minor At-Fault Accident (under $2000 of damage) 3
Major At-Fault Accident (above $2000 of damage) 4
Major Traffic Law Violation includes: Operating to endanger and OUI. 5

If you have earlier surcharges, having three years in a row of clean driving will earn you a Step 14 rating, according to the state’s ‘Clean Slate’ program.

Remember that all drivers on your insurance policy are in your SDIP statement. If one of them has any surcharge points, it can wipe out the credit points that other members have. You should be sure that you understand how your insurance policy is affected by SDIP points.

The SDIP program is operated by the state’s Merit Rating Board. You may appeal a Surcharge Notice to the Board of Appeal Division of Insurance, and you can 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.

For further insurance surcharge information, please contact Commonwealth of Mass, Merit Rating Agency: (617) 351-4400.