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					CHAPTER 2

Automobile Insurance
Kathryn Anbinder Covarrubias

§ 2.1    Introduction .......................................................................... 2–1

§ 2.2    Compulsory Bodily Injury Liability Coverage.................. 2–2
         § 2.2.1       Vehicles Covered................................................... 2–2
         § 2.2.2       Persons Covered.................................................... 2–4
         § 2.2.3       Limits of Coverage................................................ 2–5

§ 2.3    Optional Bodily Injury Liability Coverage........................ 2–5
         § 2.3.1       Persons Covered.................................................... 2–5
         § 2.3.2       Types of Uses Excluded ........................................ 2–6
                       (a)      The “Regular Use” Exclusion ...................... 2–7
                       (b)      The “Business Use” Exclusion .................... 2–8
         § 2.3.3       Accidents Occurring Outside
                       of Massachusetts ................................................... 2–9
         § 2.3.4       Limits of Coverage.............................................. 2–10

§ 2.4    Personal Injury Protection Coverage ............................... 2–10
         § 2.4.1       Benefits Provided ................................................ 2–10
         § 2.4.2       Presentation of Claims .........................................2–11
         § 2.4.3       Persons Entitled to Benefits ................................ 2–13
         § 2.4.4       The Effect of Coverage Under a Health
                       Insurance Plan or Policy...................................... 2–14
         § 2.4.5       Exclusions from Benefits .................................... 2–15
         § 2.4.6       The Impact of PIP Benefits on Tort Claims......... 2–16

§ 2.5    Medical Payments Coverage ............................................. 2–16



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                  MASSACHUSETTS LIABILITY INSURANCE MANUAL


§ 2.6   Uninsured/Underinsured Motorist Coverage...................2–18
        § 2.6.1   Persons Covered...................................................2–18
        § 2.6.2   Benefits Payable...................................................2–21
        § 2.6.3   Presentation of Claims .........................................2–22

EXHIBIT 2A—Massachusetts Automobile Insurance Policy .......2–25




2–ii                                                                2nd Edition 2011
CHAPTER 2

Automobile Insurance
Kathryn Anbinder Covarrubias


                                 Scope Note
         This chapter addresses insurance coverage for bodily injuries
         resulting from the ownership, maintenance, or use of motor
         vehicles. It begins by discussing compulsory and optional cov-
         erage for bodily injury liability. It then focuses on personal in-
         jury protection (PIP) and medical payments (MedPay) coverage.
         The chapter concludes by reviewing coverage for torts commit-
         ted by uninsured or underinsured motorists.



§ 2.1        INTRODUCTION
The Massachusetts (Personal) Automobile Insurance Policy “covers accidents
and losses which result from the ownership, maintenance or use of autos.” Mas-
sachusetts Automobile Insurance Policy (Automobile Insurers Bureau 2008 ed.)
(see Exhibit 2A). Therefore, there must be a sufficient causal connection be-
tween the use of a motor vehicle and the injuries claimed in order for coverage
to apply. See Rischitelli v. Safety Ins. Co., 423 Mass. 703 (1996) (no personal
injury protection, medical payments, or uninsured motorist coverage available to
claimant injured while occupying his vehicle when injuries resulted from assault
and battery by irate motorist following “fender bender” accident); Sabatinelli v.
Travelers Ins. Co., 369 Mass. 674 (1976) (no bodily injury liability coverage
available to insured who, while seated in his running auto, shot claimant); Bon-
ina v. Marshall, 71 Mass. App. Ct. 904 (2008) (injuries suffered by officer in
course of making arrest did not arise out of use of vehicle); Tae v. Tae, 57 Mass.
App. Ct. 297 (2003) (no bodily injury liability coverage available when insured
drained gasoline from his vehicle and into a bucket and set himself on fire, re-
sulting in an explosion and massive fire causing injury to his children). Thus,
being in or around a vehicle when an injury occurs, in and of itself, is not suffi-
cient to trigger coverage under the policy. However, injuries caused, at least in
part, as the result of a motor vehicle’s motion in the course of its operation may
trigger coverage. See Assetta v. Safety Ins. Co., 43 Mass. App. Ct. 317 (1997)
(movement of vehicle affecting trajectory of bottle thrown from it sufficient to
trigger underinsured motorist coverage for injuries to pedestrian struck by bottle);


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§ 2.1                 MASSACHUSETTS LIABILITY INSURANCE MANUAL


see also White v. Am. Cas. Ins. Co., 53 Mass. App. Ct. 66 (2001) (reversing trial
court’s summary judgment in favor of insurer and holding that whether vehicle’s
horn caused rottweiler to bite motorist was a question for the factfinder). Injuries
caused by the loading or unloading of a vehicle may also be covered. See Metro.
Prop. & Cas. Ins. Co. v. Santos, 55 Mass. App. Ct. 789 (2002) (compulsory cover-
age available when injury occurred while fish was being loaded onto pickup truck).

The Supreme Judicial Court has provided additional guidance regarding this
necessary causal relationship between an automobile’s use and the injuries un-
derlying the claim against the insured. In Ruggerio Ambulance Service v. Na-
tional Grange Mutual Insurance Co., 430 Mass. 794, 795–99 (2000), involving a
commercial automobile insurance policy, the estate of a man who had stopped
breathing before an ambulance arrived and died shortly thereafter brought a
wrongful death action against the local ambulance company. The company’s
response had been delayed because the ambulance that was initially dispatched
to the man’s home was in a motor vehicle accident en route, and the company
was forced to dispatch a second ambulance. The court ruled that the ambulance
service’s automobile insurer had a duty to defend but not to indemnify, finding
that “the relationship between the decedent’s death and the [motor vehicle acci-
dent involving the first ambulance] was too attenuated for coverage under a mo-
tor vehicle policy.” Ruggerio Ambulance Serv. v. Nat’l Grange Mut. Ins. Co., 430
Mass. at 798.

The following sections explain the types of coverages applicable to claims for
bodily injuries resulting from the ownership, maintenance, or use of motor vehi-
cles. In determining the applicability of coverage for a given claim, the “Intro-
duction,” “Definitions,” “Our Agreement,” “General Provisions and Exclusions,”
“Cancellation and Renewal” and “When There Is an Accident or Loss” sections of
the policy should be consulted, as well as the specific coverage part under which
the claim is being made. Any applicable Massachusetts mandatory endorsement
should also be consulted.


§ 2.2          COMPULSORY BODILY INJURY LIABILITY
               COVERAGE

§ 2.2.1        Vehicles Covered
Compulsory bodily injury coverage applies only to accidents that occur in the
Commonwealth of Massachusetts and involve

        • the vehicle described on the policy’s declarations page;


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AUTOMOBILE INSURANCE                                                           § 2.2


     • a vehicle used as a temporary substitute (due to breakdown,
       repair, servicing, loss, or destruction) for the vehicle described on
       the policy’s declarations page, as long as the substitute vehicle is
       not owned by the named insured or his or her spouse;

     • a permanent replacement for the vehicle described on the policy’s
       declarations page or, if coverage is requested within ten days of
       purchase, an additional auto purchased by the named insured; or

     • most trailers designed for use on public roads while attached to
       the insured vehicle.

See Massachusetts Automobile Insurance Policy 2–3 (definition of “Your Auto”),
4 (Part 1, “Bodily Injury to Others”); see also Hanover Ins. Co. v. Fasching, 52
Mass. App. Ct. 519, 520 (2001) (holding that compulsory insurance “only covers
damages caused by an automobile described on the policy’s coverage-selection
page (or a temporary substitute or permanent replacement)”) (cross-reference
omitted).

As mentioned above, coverage is provided to anyone using the insured vehicle
with the named insured’s consent. However, no compulsory coverage is provided
to anyone using the insured vehicle without the owner’s consent. Hanover Ins.
Co. v. Locke, 35 Mass. App. Ct. 679 (1993). One exception to this rule relates to
vehicles owned by rental car companies either registered in Massachusetts or
rented from a Massachusetts location. Pursuant to G.L. c. 90, § 32E, anyone
authorized to operate a rental car by the rentee will be deemed to be operating
the vehicle with the rental car company’s consent for purposes of applying com-
pulsory liability coverage under the rental car company’s bond or insurance pol-
icy. However, any additional coverage that would otherwise be provided to the
operator under his or her own or a household member’s policy should not apply
in light of the Locke decision. See Vergato v. Commercial Union Ins. Co., 50
Mass. App. Ct. 824 (2001) (holding that the “owner” of a rental car was the les-
sor and that the renter’s son—who was injured when a friend drove the car into a
tree, where neither the son nor the friend had the lessor’s consent to operate the
car—was not entitled to optional bodily injury coverage under the renter’s auto-
mobile insurance policy).

Consent to the bailment of the insured vehicle (i.e., giving custody of the vehicle
to another) generally satisfies the consent requirement. Blair v. Travelers Ins.
Co., 288 Mass. 285 (1934). Therefore, the owner’s consent to the specific use or
operation of the vehicle at the time of the accident is not necessary, and coverage
will apply even if the operator to whom custody of the vehicle was given was us-
ing it outside of the scope of the owner’s permission. Blair v. Travelers Ins. Co.,
288 Mass. at 288–91. Use of the vehicle by a “second permittee” may also be

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§ 2.2                 MASSACHUSETTS LIABILITY INSURANCE MANUAL


covered, but only if he or she was permitted to use the vehicle by a “first permit-
tee” (the person to whom the owner originally relinquished possession of the vehi-
cle) who had general dominion and control over the vehicle. Drescher v. Travelers
Ins. Co., 359 Mass. 458 (1971).


§ 2.2.2        Persons Covered
Compulsory bodily injury coverage does not apply to

        • injuries to guest occupants of the insured automobile,

        • accidents occurring either outside of Massachusetts or in places
          within the state where the public has no right of access, or

        • injuries to employees of the legally responsible person if the
          injured employee is entitled to benefits under the Massachusetts
          Workers’ Compensation Act as a result of the accident.

See G.L. c. 90, § 34M; Massachusetts Automobile Insurance Policy 4 (Part 1,
“Bodily Injury to Others”).

The exception to coverage for employees of the owner or operator of the insured
vehicle is based on the employee’s “entitlement” to benefits under the Massa-
chusetts Workers’ Compensation Act as a result of the accident and applies re-
gardless of whether the responsible owner or operator failed to actually purchase
workers’ compensation coverage. Hanover Ins. Co. v. Ramsey, 405 Mass. 1101
(1989).

The ultimate purpose of compulsory bodily injury liability coverage is to com-
pensate persons injured by negligent motorists. Therefore, coverage is generally
available to such injured persons even if the insured

        • made material, false statements when applying for his or her policy
          or motor vehicle registration;

        • failed to cooperate with the company after the accident; or

        • willfully caused injury to the claimant.

See Cassidy v. Liberty Mut. Ins. Co., 338 Mass. 139 (1958); Wheeler v. O’Connell,
297 Mass. 549 (1937). However, in such instances, the insurer may seek reim-
bursement directly from the insured for payments made under compulsory cov-
erage to the injured party.



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AUTOMOBILE INSURANCE                                                         § 2.2


§ 2.2.3      Limits of Coverage
All Massachusetts personal automobile insurance policies and some commercial
policies are written with split limits of coverage (e.g., $50,000 per person/
$100,000 per accident). The compulsory bodily injury liability coverage limit is
presently $20,000 per person/$40,000 per accident. All claims arising out of a
bodily injury sustained by an individual in an automobile accident are covered
within the applicable “per person” limit of coverage. Therefore, only the “per
person” limit of coverage (rather than the “per accident” limit) will apply both to
claims presented on behalf of the individual injured in the accident and to claims
for loss of consortium or consortium-like damages. See Santos v. Lumbermen’s
Mut. Cas. Co., 408 Mass. 70 (1990). Because the Massachusetts courts have
held that negligent infliction of emotional distress claims do not constitute sepa-
rate claims for “bodily injury” under the terms of the policy, a single “per per-
son” limit of coverage also reflects the maximum amount of recovery available
in situations where the negligent infliction of emotional distress claim is pre-
sented in conjunction with the bodily injury claim for the individual injured in
the accident. McNeill v. Metro. Prop. & Cas. Co., 420 Mass. 587 (1995). This
will be upheld even if there is a showing of physical manifestation of injury by
the negligent infliction of emotional distress. McNeill v. Metro. Prop. & Cas.
Co., 420 Mass. at 590–91.


§ 2.3        OPTIONAL BODILY INJURY LIABILITY
             COVERAGE

§ 2.3.1      Persons Covered
With the exception of a few situations, optional bodily injury liability coverage
pertains to the named insured and members of his or her household while using
any motor vehicle with the owner’s consent. Coverage is also provided to any-
one else using the specific vehicle covered under the policy with the named in-
sured’s consent. However, no optional liability coverage is provided to anyone
qualifying as an insured (i.e., as a named insured or a household member) unless
he or she is driving the vehicle involved in the accident with its owner’s consent.
Hanover Ins. Co. v. Locke, 35 Mass. App. Ct. 679 (1993). The standard for de-
termining consent to use the vehicle for purposes of this coverage may be a
lesser one than the “consent to the bailment” standard applying to compulsory
bodily injury coverage. Blair v. Travelers Ins. Co., 291 Mass. 432 (1935).

In order to qualify for coverage as a “household member” of the named insured,
the person seeking coverage must be related to the named insured by “blood,

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§ 2.3                  MASSACHUSETTS LIABILITY INSURANCE MANUAL


marriage or adoption.” In this regard, an actual legal or blood relationship must
be established, and most relationships that are not legally binding will not serve
to qualify an individual as a “household member” for purposes of triggering
coverage. Pisani v. Travelers Ins. Co., 29 Mass. App. Ct. 964 (1990). For poli-
cies issued on or after January 1, 1993, the definition of “household member”
expressly includes “step-children.” See Massachusetts Automobile Insurance
Policy 3 (definition of “Household Member”). Wards and foster children also
qualify under this definition. In addition, Massachusetts courts have recognized
the principle of “dual residency.” Vaiarella v. Hanover Ins. Co., 409 Mass. 523
(1991). Therefore, a person may qualify as a “household member” of different
named insureds living at different locations under the proper set of circum-
stances. Vaiarella v. Hanover Ins. Co., 409 Mass. at 526–27; see also Metro.
Prop. & Cas. Ins. Co. v. Morel, 60 Mass. App. Ct. 379 (2004) (analyzing an ex-
cess policy and holding that adult son resided in father’s “household” under the
facts of the case, even though father lived apart from his wife and children). But
see John Hancock Prop. & Cas. Ins. Co. v. Scannell, 64 Mass. App. Ct. 906
(2005) (holding that adult child living in home that insured had formerly lived in
but was not currently living in was not “household member” of insured). Dual
residency usually involves minors spending time with parents who have separated
or divorced.


§ 2.3.2        Types of Uses Excluded
Coverage does not apply to injuries

        • to an employee of the person using the vehicle if the employee
          was injured in the scope and course of employment;

        • involving the use of a vehicle owned or regularly used by the
          named insured or a member of his or her household, unless the
          vehicle involved in the accident is the insured vehicle described
          on the policy’s declarations page;

        • involving the use of any vehicle for business activities concerning
          the selling, servicing, repairing, or parking of automobiles, unless
          the vehicle qualifies as the insured vehicle under the policy; and

        • involving the business use (other than selling, servicing, repairing,
          or parking automobiles) of commercial vehicles.

See Massachusetts Automobile Insurance Policy 13 (Part 5, “Optional Bodily
Injury to Others”).



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AUTOMOBILE INSURANCE                                                          § 2.3


Courts will uphold the exclusions contained in this and other optional coverage
parts of the policy once it is shown that the exclusion relied on applies to the
accident in question. Thomas v. Hartford Accident & Indem. Co., 398 Mass. 782
(1986). Furthermore, the claimant has the burden of proving that he or she quali-
fies under the terms of the policy for the coverage being sought. Manning v.
Fireman’s Fund Am. Ins. Co., 397 Mass. 38 (1986). On the other hand, the bur-
den of proof concerning the application of any exclusion rests with the insurer.
However, “[b]ecause the language of the standard policy is prescribed by statute
and controlled by the Division of Insurance rather than the individual insurer,”
the general rule of construction resolving ambiguities in the policy against the
insurer does not apply. Bilodeau v. Lumbermens Mut. Cas. Co., 392 Mass. 537,
541 (1984).

Note that the exclusions for injuries to employees by working conditions or fel-
low employees are not limited to individuals entitled to recovery under the
Workers’ Compensation Act. Accordingly, a showing of an employee-employer
or coemployee relationship, coupled with an injury occurring in the course and
scope of the employment relationship, should be sufficient to trigger the exclusion.

(a)      The “Regular Use” Exclusion
The exclusion for injuries occurring while the named insured or a member of his
or her household is using a vehicle other than one listed on the policy’s declara-
tions page, but one owned or regularly used by him or her or a member of his or
her household, is commonly referred to as the “regular use” exclusion and has
been tested and enforced in Massachusetts. Hanover Ins. Co. v. Bezza, 78 Mass.
App. Ct. 1104 (2010) (unpublished decision; text available at 2009 WL
6056958); Safety Ins. Co. v. Day, 65 Mass. App. Ct. 15 (2005); RLI Ins. Co. v.
Hanover Ins. Co., 42 Mass. App. Ct. 913 (1997); Turner v. Aetna Cas. & Sur.
Co., 36 Mass. App. Ct. 921 (1994); Woodman v. Hartford Accident & Indem.
Co., 27 Mass. App. Ct. 1120 (1989). In addition, Massachusetts courts have held
that this exclusion applies to the use of any one of a pool of vehicles assigned to
the insured’s use (e.g., use of any vehicle from an available fleet assigned to a
police officer or taxi-cab driver triggers the exclusion, regardless of the opera-
tor’s previous use of the specific vehicle involved in the accident). Galvin v.
Amica Mut. Ins. Co., 11 Mass. App. Ct. 457 (1981). The frequency and particu-
lar use of a given vehicle may also help determine whether an individual’s use of
the vehicle in question constitutes a “regular use.” See Volpe v. Prudential Prop.
& Cas. Ins. Co., 802 F.2d 1 (1st Cir. 1986). For example, a systematic monthly
use of a given vehicle for a specific purpose (e.g., a monthly visit to a marriage
counselor) may constitute an excluded regular use, whereas sporadic use of a
vehicle for various purposes on a similar number of occasions may not necessarily
be found to constitute a regular use. On the other hand, in construing someone’s

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§ 2.3                MASSACHUSETTS LIABILITY INSURANCE MANUAL


regular use of a vehicle, his or her prior use of that vehicle as a passenger will
also be considered. Turner v. Aetna Cas. & Sur. Co., 36 Mass. App. Ct. 921
(1994); see also Gordon v. Safety Ins. Co., 417 Mass. 687 (1994). Furthermore,
the individual’s past opportunity to use the involved vehicle (i.e., availability of
the vehicle for his or her use) must also be considered. RLI Ins. Co. v. Hanover
Ins. Co., 42 Mass. App. Ct. 913 (1997).

Finally, when determining the applicability of the regular-use exclusion, it is
important to consider whether coverage sought under an additional policy (i.e.,
one other than the policy listing the vehicle involved in the accident) pertains to
a policy issued before 1994 or one issued in 1994 or thereafter, since the regular-
use exclusion, as it applies to a named insured, was narrowed in policies issued
on or after January 1, 1994. Before 1994, whenever an individual was operating
a vehicle owned or regularly used either by himself or herself or any household
member, no optional bodily injury coverage would apply to him or her, even
under a policy issued to the operator, and regardless of whether the operator,
himself or herself regularly used the involved motor vehicle. For policies issued
on or after January 1, 1994, however, the operator is provided with optional bod-
ily injury coverage under an additional policy issued in his or her name, as long
as he or she did not own the involved vehicle and did not “regularly use” it.

Policies issued on or after January 1, 1996, go even further to provide a resident
spouse of the named insured with coverage while using another vehicle, as long
as neither the named insured spouse nor the operator spouse own or regularly
use the involved automobile. See Massachusetts Automobile Insurance Policy 13
(Part 5, “Optional Bodily Injury to Others”); see also, e.g., Massachusetts Man-
datory Endorsement No. M-0099-S (Jan. 1997) (endorsement to the sixth edition
of the policy). Note also that the changes to the regular-use exclusion contained
in 1994 and subsequently issued policies are limited to broadening the scope of
protection provided only to individuals qualifying as a named insured (policies
issued in 1994 and 1995) or as a resident spouse of a named insured (policies
issued as of January 1, 1996). Any other person who qualifies as a “household
member” will not benefit from this broadening of coverage.

(b)      The “Business Use” Exclusion
The “business use” exclusion described above should apply to any business use
of the vehicle, as it is not limited in scope to the named insured’s or a household
member’s own business. However, this exclusion does not apply to the use of
certain categories of vehicles for business purposes. The current edition of the
Massachusetts policy clarifies that most vehicles weighing less than 10,000
pounds and that are not used, in principle, for transporting goods or materials,



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AUTOMOBILE INSURANCE                                                          § 2.3


are not subject to this exclusion. Massachusetts Automobile Insurance Policy 13
(Part 5, “Optional Bodily Injury to Others”).

Coverage under any optional coverage part of the policy, including optional bod-
ily injury liability coverage, is also excluded for accidents that involve the in-
sured vehicle while it is being used as a public livery or conveyance or for inten-
tionally caused injuries. See Massachusetts Automobile Insurance Policy 12–13
(“Optional Insurance”). In addition, no optional coverages apply to claims where
the insurer can demonstrate that its insured failed to provide accurate or com-
plete information relating to operators of the vehicle or the vehicle’s principal
place of garaging that, if disclosed, would have increased the premium charged
for the policy. Hanover Ins. Co. v. Leeds, 42 Mass. App. Ct. 54 (1997); see also
Massachusetts Automobile Insurance Policy 28 (“False Information”).


§ 2.3.3      Accidents Occurring Outside of Massachusetts
Unlike compulsory bodily injury coverage, optional bodily injury coverage ap-
plies both to guest occupants of the insured vehicle and to accidents occurring
anywhere in the United States, including its territories or possessions, or Canada.
See Massachusetts Automobile Insurance Policy 13 (Part 5, “Optional Bodily In-
jury to Others”), 24 (“Where You Are Covered”). However, accidents in other
parts of the world are not covered for purposes of any compulsory or optional
coverages. Heinrich-Grundy v. Allstate Ins. Co., 402 Mass. 810 (1988).

For covered accidents that occur outside of Massachusetts, optional bodily in-
jury coverage either provides the insured with the “types and amounts of cover-
age required” of the insured vehicle by the foreign jurisdiction where the acci-
dent occurred or increases the policy limits, if necessary, to comply with the
foreign jurisdiction’s financial responsibility laws. See Massachusetts Automo-
bile Insurance Policy 14 (Part 5, “Optional Bodily Injury to Others”). Thus, the
coverage will change if the insured, as a nonresident operating a vehicle regis-
tered and insured in another state (Massachusetts), is subject to the foreign juris-
diction’s laws. If so, not only will bodily injury liability limits be increased as
required, but any other type of coverage required of nonresident vehicles travel-
ing through the state or Canadian province may also be granted or increased. In
this regard, particular attention should be given to accidents occurring in Can-
ada, as treaties between the Canadian provinces and U.S. insurers generally pro-
vide that the U.S. insurer’s policy will be construed as if it were issued under the
terms and conditions required of Canadian vehicles registered and insured in the
province where the accident occurred.




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§ 2.3                  MASSACHUSETTS LIABILITY INSURANCE MANUAL


§ 2.3.4        Limits of Coverage
Unless the limits of coverage are increased as a result of an accident in a foreign
jurisdiction, the total amount of coverage available is reflected by the limits
shown for Part 5 on the declarations page. See Massachusetts Automobile Insur-
ance Policy 14 (Part 5, “Optional Bodily Injury to Others”). The Massachusetts
courts soundly rejected the argument that the limits shown next to optional bod-
ily injury coverage should be added to the compulsory limits. Hanover Ins. Co.
v. Mota, 416 Mass. 1011 (1994).


§ 2.4          PERSONAL INJURY PROTECTION
               COVERAGE

§ 2.4.1        Benefits Provided
Personal injury protection (PIP) or “no-fault” benefits provide coverage for

        • reasonable and necessary medical and funeral expenses incurred
          within two years of the accident;

        • lost wages of up to 75 percent of the injured person’s average
          weekly gross wage or equivalent for the year immediately pro-
          ceeding the accident (if employed at the time of the accident) or
          of up to 75 percent of the injured person’s actual loss of earning
          power (if not employed at the time of the accident); and

        • replacement services paid to someone outside of the injured per-
          son’s household to perform necessary services that the injured
          party would have otherwise performed if not for his or her disability
          resulting from the accident.

See G.L. c. 90, § 34A.

However, amounts recoverable as “lost wages” are further limited to amounts
“actually lost” as a result of the accident. G.L. c. 90, § 34A. “If the victim is
unemployed, he is entitled to the same percentage of wages he can prove he
would have received from work he would have had had he not been injured.”
Pinnick v. Cleary, 360 Mass. 1 (1971). Therefore, diminution of earning capacity
is not recoverable if the individual would not have otherwise been employed and
earning wages. Malave v. Allstate Ins. Co., 24 Mass. App. Ct. 901 (1987); Pope
v. Breton, 56 Mass. App. Dec. 91 (1975). Likewise, no lost wages benefits are
recoverable when the involved individual is killed in the automobile accident, as

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a deceased person cannot “actually lose” any wages. Flanagan v. Liberty Mut.
Ins. Co., 383 Mass. 195 (1981). However, where wages are “actually lost,” the
calculation of benefits is based on 75 percent of the fifty-two-week preaccident
average weekly wage, rather than on the lesser of either that sum or 75 percent
of the actual weekly wage earned at the time of the accident. Gomes v. Metro.
Life Ins. Co., 45 Mass. App. Ct. 27 (1998). The average weekly wage is based on
the number of weeks in the workforce, rather than an average of the prior fifty-
two weeks. DiGiacomo v. Metro. Prop. & Cas. Ins. Co., 66 Mass. App. Ct. 343
(2006) (finding that since insured had been in workforce for only ten weeks
prior to accident, her average weekly wage was based on those ten weeks rather
than average of prior fifty-two weeks).


§ 2.4.2      Presentation of Claims
Personal injury protection claims must be presented “as soon as possible” after
the accident and, in every case, within two years from the time of the accident.
G.L. c. 90, § 34M; see also Salafia v. CNA Ins. Co., 2001 Mass. App. Div. 8.
Claims must include a written description of the nature and extent of injuries,
the treatment received and contemplated, and “such other information as may
assist in determining the amount due and payable.” G.L. c. 90, § 34M. Benefits
are not “due and payable” until the insurer obtains sufficient supporting docu-
mentation to assess the reasonableness or necessity of claims presented, includ-
ing reports from an independent medical examiner, if requested. Brito v. Liberty
Mut. Ins. Co., 44 Mass. App. Ct. 34 (1997); see also Bohorquez v. Metro. Prop.
& Cas. Ins. Co., 2000 Mass. App. Div. 226.

The injured person must, if requested, authorize the insurer to obtain details of
his or her salary or wages for the year preceding the accident and must, if re-
quested, authorize the insurer to conduct any necessary investigation regarding
the existence and operation of a wage continuation program. G.L. c. 90, § 34M.
In addition, the injured person must “submit to physical examinations by physi-
cians selected by the insurer as often as may be reasonably required” and must
“do all things necessary” to enable the insurer to obtain information in support
of the claim presented. G.L. c. 90, § 34M; Brito v. Liberty Mut. Ins. Co., 44
Mass. App. Ct. 34 (1997). If the party claiming benefits does not cooperate, the
insurer may use it as a defense against any subsequent action by the injured
party for recovery of such benefits. Brito v. Liberty Mut. Ins. Co., 44 Mass. App.
Ct. 34 (1997); Brady v. Allstate Ins. Co., 1984 Mass. App. Div. 242. Likewise, an
insurer may use a party’s noncooperation as a defense against a subsequent ac-
tion by a medical provider. Chiropractic Healthcare Ctrs. v. Amica Mut. Ins.
Co., 2003 Mass. App. Div. 130; Action Physical Therapy & Rehab. v. Amica
Mut. Ins. Co., 2003 Mass. App. Div. 127. An insurer has a right to a jury trial in


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§ 2.4               MASSACHUSETTS LIABILITY INSURANCE MANUAL


an action brought by a medical provider for unpaid benefits for treatment rendered
to an insured. Boehm v. Premier Ins. Co., 446 Mass. 689 (2006).

A claimant’s failure to submit to an independent medical examination scheduled
by the insurer provides a sufficient basis on which the insurer may rely to dis-
claim PIP coverage. Hodnett v. Arbella Mut. Ins. Co., 1996 Mass. App. Div. 131.
This is true even if the independent medical examination is scheduled before the
insurer’s receipt of the claimant’s PIP application. Hodnett v. Arbella Mut. Ins.
Co., 1996 Mass. App. Div. 131 (exam scheduled after receipt of emergency
room bill from hospital but before submission of PIP application). An insurer
may rely on an independent medical examination performed by an orthopedic
surgeon to deny PIP benefits to a claimant who had received treatment from a
chiropractor. Boone v. Commerce Ins. Co., 451 Mass. 192 (2008). However, a
claimant’s insistence on audiotaping an independent medical exam because his
or her primary language is not English may not be a refusal to cooperate. See
Velez v. Liberty Mut. Ins. Co., 2001 Mass. App. Div. 56. Likewise, at least one
court has held that diligent efforts must be used to contact an insured to inform
him or her about the independent medical examination. See Provenzano v. Ply-
mouth Rock Assurance Corp., 2006 Mass. App. Div. 155, 157 (holding that in-
surer did not make diligent efforts to contact insured for independent medical
examinations when contact was by regular mail, noting that insurer’s termina-
tion of benefits letter—involving “an issue of particular benefit to” insurer—was
sent by certified mail).

A claimant must appear for an examination under oath if requested by the in-
surer. A claimant who does not allow himself or herself to be examined under
oath in a timely manner may forfeit coverage. See Mello v. Hingham Mut. Ins.
Co., 421 Mass. 333 (1995) (insured’s failure to submit to examination under
oath required under terms of policy and applicable statute resulted in forfeiture
of coverage). But see Knight v. CNA Ins. Co., 2002 Mass. App. Div. 3 (holding
that a genuine issue of fact existed, precluding summary judgment, as to whether
claimant failed to cooperate when he appeared for first scheduled examination
and substantially complied with document request); see also Knight v. CNA Ins.
Co., 2003 Mass. App. Div. 198 (holding that insurer need not show prejudice in
order to utilize defense of noncooperation, but that four and one-half month pe-
riod prior to requesting examination under oath was unreasonable without fur-
ther evidence of the events that transpired); Labonte v. Commercial Union Ins.
Co., 2000 Mass. App. Div. 111 (holding that insurer requiring insured who lived
in Palmer to appear at examination under oath in Boston or Foxborough was an
unreasonable demand).




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AUTOMOBILE INSURANCE                                                        § 2.4


§ 2.4.3      Persons Entitled to Benefits
Persons entitled to PIP benefits include

     • anyone occupying the insured vehicle with the insured’s consent;

     • the named insured or anyone else living in his or her household if
       injured either while occupying or struck by an auto that does not
       have Massachusetts compulsory insurance; and

     • any pedestrian struck by the insured’s automobile in Massachu-
       setts, or any Massachusetts resident struck by the insured’s auto-
       mobile outside of Massachusetts who was a pedestrian at the time.

G.L. c. 90, § 34A.

In order to qualify as an occupant of the insured automobile, the person seeking
coverage must, at the time of the accident, be either “in, upon, entering into, or
getting out of” the insured vehicle. Leaning on the insured vehicle as a crutch to
walk around it before actual entry into the automobile does not constitute “occu-
pancy” of the vehicle under the terms of the policy. Rosebrooks v. Nat’l Gen. Ins.
Co., 13 Mass. App. Ct. 1049 (1982). In addition, once an individual has com-
pleted the process of exiting the vehicle, has closed the automobile’s door and
has proceeded toward another endeavor, he or she is no longer considered an
“occupant” of the vehicle. See Kelleher v. Am. Mut. Ins. Co. of Boston, 32 Mass.
App. Ct. 501 (1992).

Any person living in the named insured’s household and injured either while
occupying or struck by an automobile without Massachusetts compulsory insur-
ance is entitled to recovery, regardless of whether that individual qualifies as a
“household member” under the terms of the policy on the basis of a “blood,
marital, or adoption” relationship with the named insured. The purpose of this
broadening of coverage is to reduce the number of claims under the Massachu-
setts Assigned Claims Plan, which provides PIP benefits to Massachusetts resi-
dents not otherwise provided them under a Massachusetts insurance policy or
bond. See G.L. c. 90, § 34N.

If the claimant seeking PIP benefits is injured outside of Massachusetts and pur-
sues a claim against an alleged legally responsible party, his or her insurance
company may withhold payment of personal injury protection benefits until the
claim against the third party has been resolved either through settlement or
judgment. See G.L. c. 90, § 34M.




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If an individual claims lost wages benefits under PIP coverage and is also receiv-
ing benefits under a wage continuation program from his or her employer, his or
her recovery for lost wages is limited to the difference between the weekly
amounts paid to that person under his or her employer’s wage continuation pro-
gram and 75 percent of his or her average gross wage for the year immediately
proceeding the accident. See G.L. c. 90, § 34A. If, however, within one year of
the last payment for PIP benefits made as a result of an accident the injured
party loses wages due to any other illness or injury, such amounts that would
otherwise have been recoverable at the outset of the claim if not for benefits re-
ceived through a wage continuation program will then become due and payable.
G.L. c. 90, § 34A. In addition, if the wage continuation program allows benefits
to be converted into either cash or additional retirement credit, the PIP insurer
must reimburse the program for the money or retirement credits lost as a result
of the accident. G.L. c. 90, § 34A.


§ 2.4.4      The Effect of Coverage Under a Health
             Insurance Plan or Policy
Once $2,000 has been paid toward medical expenses under PIP coverage, no
further payments for medical expenses are recoverable to the extent that such
expenses are also covered under any health insurance plan or policy under which
the injured person is covered. Medicare, Medicaid, or fully self-insured Em-
ployee Retirement Income Security Act (ERISA) programs are not considered
health-care plans or policies for this purpose. See Massachusetts Division of
Insurance Bulletin No. B-90-2. In order to recover PIP benefits in excess of
$2,000, a claimant with health insurance or membership in a health maintenance
organization (HMO) is required to “cooperate and deal in good faith with both
[the health insurer or plan] and the [PIP insurer]” and “to comply with the provi-
sions of both insurance policies.” Dominguez v. Liberty Mut. Ins. Co., 429 Mass.
112, 118 (1999) (citing Sorensen v. Sorensen, 369 Mass. 350, 364 (1975)). Thus,
the claimant, who obtained treatment from a physician who was not one of his
HMO’s authorized providers, could not, after the HMO denied payment, obtain
reimbursement from the PIP carrier for amounts in excess of $2,000. Dominguez
v. Liberty Mut. Ins. Co., 429 Mass. at 118; see Khudisman v. CNA Ins. Co., 2000
Mass. App. Div. 217 (finding that PIP payments in excess of $2,000 were war-
ranted where the claimant’s health plan provided no benefits with respect to the
particular services—chiropractic treatment—for which the claimant sought re-
imbursement); see also Arbit v. Amica Mut. Ins. Co., 2002 Mass. App. Div. 131
(holding PIP available to claimant who had health insurance but chose a course
of treatment not included within health plan). A medical provider that has con-
tracted with a health insurer to accept a reduced payment for services may not



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AUTOMOBILE INSURANCE                                                           § 2.4


seek additional payment from the PIP provider. Shah v. Liberty Mut. Ins. Co., 56
Mass. App. Ct. 903 (2002).

The insurer also has the option to pay premiums to continue or renew the claim-
ant’s health-care plan or policy if he or she is either unwilling or unable to pay
such premiums to keep his or her health-care coverage in force. G.L. c. 90,
§ 34A. However, any amounts paid to continue the health-care plan or policy do
not reduce the amount of available benefits recoverable under PIP coverage.


§ 2.4.5       Exclusions from Benefits
Personal injury protection benefits do not apply to the following:

     • any person injured while occupying a motorcycle or moped;

     • any person who contributed to his or her injury by

          – operating a vehicle while under the influence of alcohol or
            drugs,

          – committing a felony or seeking to avoid arrest, or

          – specifically intending to injure himself, herself, or others; or

     • any person entitled to workers’ compensation benefits as a result
       of the accident.

G.L. c. 90, § 34A.

When determining whether benefits are excluded to involved operators due to
intoxication, fleeing arrest, or intent to injure, an insurer must show that such
conduct actually “contributed to [the] injury.” Jenks v. Allstate Ins. Co., 1987
Mass. App. Div. 188. Persons excluded from receiving benefits based on enti-
tlement to workers’ compensation include those whose work-related benefits are
derived from workers’ compensation–type statutes related to federal employees.
Mailhot v. Travelers Ins. Co., 375 Mass. 342 (1978). As the entitlement to work-
ers’ compensation–type benefits controls, no PIP benefits whatsoever are payable
to such individuals, regardless of whether recovery under the “no fault” statute
would have exceeded the recovery through workers’ compensation. Flaherty v.
Travelers Ins. Co., 369 Mass. 482 (1976). However, claimants who have recovered
benefits under the Massachusetts police officer’s and firefighter’s recovery stat-
ute (G.L. c. 41, §§ 100, 111F) may still be entitled to recover PIP benefits. Cox v.
Safety Ins. Co., 1997 Mass. App. Div. 211. Nevertheless, based on the Mailhot
decision, which involved a statute almost identical to the Massachusetts police

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§ 2.4                MASSACHUSETTS LIABILITY INSURANCE MANUAL


officer’s and firefighter’s recovery statute, a decision on this issue by the Ap-
peals Court or Supreme Judicial Court may well yield a different result from that
in the Cox case.


§ 2.4.6      The Impact of PIP Benefits on Tort Claims
The owner or operator of any vehicle registered in Massachusetts is statutorily
exempt from legal liability to the extent of PIP benefits recoverable (or which
would have been recoverable but for a deductible selected by the injured party)
as a result of an accident occurring in Massachusetts. See G.L. c. 90, § 34M.
Therefore, in such circumstances, the insurer of the alleged negligent party may
reduce the value of the injured person’s claim by PIP benefits that the injured
person received or would have received but for his or her election of a deductible
for such coverage. G.L. c. 90, § 34M. However, such sums may only be used to
calculate a reduction in damages of the claimant’s injury, rather than a reduction
in limits of available liability coverage. G.L. c. 90, § 34M; see also DiMarzo v.
Am. Mut. Ins. Co., 389 Mass. 85 (1983). If the claimant does not receive PIP
benefits due to a misrepresentation in the policy application, the legally liable
operator will not be exempt from tort liability for expenses that would have been
paid by PIP. Figuereo v. Valverde, 60 Mass. App. Ct. 76 (2003).

The Massachusetts tort threshold, G.L. c. 231, § 6D, does not apply to injured
Massachusetts residents who are subject to the Massachusetts “no-fault” system
but are unable to recover such benefits under it terms. See Chipman v. MBTA,
366 Mass. 253 (1974). Therefore, a Massachusetts resident injured while occu-
pying a motorcycle, who is specifically exempt from recovering personal bene-
fits under the Massachusetts “no-fault” statute, is entitled to recover pain and
suffering damages, regardless of whether he or she has met the Massachusetts
tort threshold. Murphy v. Bohn, 377 Mass. 544 (1979). On the other hand, in-
jured persons from other states who are not subject to the provision of the Mas-
sachusetts “no-fault” statute must satisfy the Massachusetts tort threshold in
order to recover pain and suffering damages. Cyr v. Farias, 367 Mass. 720
(1975). However, nonresidents are entitled to recover special damages under any
liability coverage pertaining to the individual responsible for his or her injuries.


§ 2.5        MEDICAL PAYMENTS COVERAGE
Medical payments coverage provides benefits for reasonable and necessary
medical and funeral services incurred as a result of a covered accident. Unlike
PIP coverage, it does not cover lost wages or replacement services. Any medical
or funeral expenses not recoverable under the terms of the personal injury pro-
tection statute are recoverable under medical payments coverage, including

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AUTOMOBILE INSURANCE                                                           § 2.5


medical expenses not recoverable because the claimant has a health-care plan or
policy. See Massachusetts Division of Insurance Bulletin No. B-90-2; see also
Mejia v. Am. Cas. Ins. Co., 55 Mass. App. Ct. 461 (2002) (holding that if the
claimant has a health plan, medical bills in excess of $2,000 must be submitted
to the health insurer to determine whether there is coverage under the health
policy). If the health plan has language that defers coverage under its plan due to
medical payments coverage and denies coverage for that reason, the auto insurer
must pay those medical expenses under medical payments coverage. Metro. Prop.
& Cas. Ins. Co. v. Blue Cross & Blue Shield of Mass., 451 Mass. 389 (2008).

People entitled to medical payments benefits include anyone injured while occu-
pying the insured’s automobile at the time of the accident, as well as the named
insured and members of his or her household, if he or she was struck by or oc-
cupying someone else’s vehicle at the time of the accident.

Medical payments coverage does not apply to injuries involving

     • any vehicle placed off of public roads for use as a residence;

     • any person injured in the course of his or her employment selling,
       servicing, repairing, or parking automobiles and entitled to workers’
       compensation benefits as a result of the accident;

     • any person injured in the course of his or her employment by the
       named insured or his or her spouse, with the exception of domestic
       employees not subject to workers’ compensation benefits;

     • any person occupying a vehicle without reasonable belief that he
       or she had the owner’s consent to do so; or

     • any household member occupying or struck by a vehicle owned or
       regularly used by the named insured or a member of his or her
       household, unless that vehicle is listed on the declarations page of
       the policy under which coverage is sought.

The enforceability of exclusions to medical payments coverage has been upheld
in the case of Thomas v. Hartford Accident & Indemnity Co., 398 Mass. 782
(1986) (upholding the “regular use” exclusion). Other exclusions pertaining to
optional coverages in general (as discussed in § 2.3, Optional Bodily Injury Li-
ability Coverage, above) also apply to medical payments coverage.

As with PIP benefits, medical payments benefits cover only expenses incurred
within two years of the accident date. Unlike personal injury protection pay-
ments, the payment of medical payments benefits never triggers rights of recovery
on behalf of the insurer. Allstate Ins. Co. v. Bearce, 412 Mass. 442 (1992).

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§ 2.6        UNINSURED/UNDERINSURED MOTORIST
             COVERAGE

§ 2.6.1      Persons Covered
For policies issued on or after January 1, 1989, uninsured motorist coverage is
compulsory and underinsured motorist coverage is optional. Based on the statu-
tory scheme underlying the 1988 Automobile Insurance Reform Act, and unlike
the other coverages previously discussed, uninsured/underinsured motorist cov-
erages primarily “follow” the injured party rather than the vehicle involved in
the accident. In addition, no stacking of uninsured or underinsured motorist
coverage is allowed under any Massachusetts automobile insurance policy
issued on or after January 1, 1989. Arbella Ins. Co. v. Hughes, 36 Mass. App.
Ct. 926 (1994); Plymouth Rock Assurance Corp. v. McAlpine, 32 Mass. App.
Ct. 755 (1992). Therefore, a claimant may recover only up to one policy limit
of coverage.

A person who is a named insured under any Massachusetts automobile insurance
policy can recover uninsured/underinsured motorist benefits only under a policy
naming that individual as the insured. See G.L. c. 175, § 113L. A named insured
injured while occupying a vehicle he or she owns is limited to recover such
benefits under the policy insuring the vehicle involved in the accident.
G.L. c. 175, § 113L. However, a named insured injured while occupying an
automobile that he or she does not own may recover under the policy on which
he or she is named that provides the highest available limits of coverage.
G.L. c. 175, § 113L. In accordance with the relevant statutory provisions, the
Massachusetts courts have held that an injured claimant who is a named insured
under his or her own policy is not entitled to recover under a household mem-
ber’s policy that provides higher limits of such coverage. DePina v. Safety Ins.
Co., 419 Mass. 135 (1994). This principle has been applied even where the
named insured carried only minimal limits of underinsured coverage, thereby
precluding him or her from recovering underinsured motorist benefits. Smart v.
Safety Ins. Co., 419 Mass. 144 (1994); see also Goodman v. Am. Cas. Co., 419
Mass. 138 (1994) (same principle applies when a named insured is injured as a
pedestrian). Likewise, the policy does not provide uninsured motorist coverage
for a household member who had a policy at the time of the loss if, subse-
quently, the carrier became insolvent. Mass. Insurers Insolvency Fund v. Premier
Ins. Co. of Mass., 439 Mass. 318 (2003); see also Mass. Insurers Insolvency
Fund v. Safety Ins. Co., 439 Mass. 309 (2003) (holding that claimant was not
entitled to uninsured motorist benefits because vehicle was not uninsured).
However, if one joint tortfeasor is uninsured due to his or her carrier’s insol-
vency, uninsured motorist coverage will apply. Norfolk & Dedham Mut. Ins. Co.


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AUTOMOBILE INSURANCE                                                        § 2.6


v. Quane, 442 Mass. App. Ct. 704 (2004). A claimant who does not elect to pur-
chase underinsured coverage under his or her own policy is also precluded from
recovering such benefits under either a household policy or a Massachusetts
automobile policy covering some other vehicle in which the claimant may have
been injured. Dullea v. Safety Ins. Co., 424 Mass. 37 (1997). The sole exception
to this rule applies to certain claims presented under policies issued in the year
1990. See Hanover Ins. Co. v. Shedd, 424 Mass. 399 (1997). Finally, a “listed
operator” is not a “named insured” for the purposes of uninsured/underinsured
motorist coverage. Kanamaru v. Holyoke Mut. Ins. Co., 72 Mass. App. Ct. 396
(2008); Mercadante v. Worcester Ins. Co., 62 Mass. App. Ct. 293 (2004).

If an accident results in the death of a named insured, thereby triggering under-
insured motorist recovery on behalf of a beneficiary, benefits are limited to the
coverage afforded under the named insured decedent’s policy, and the benefici-
ary is not entitled to underinsured motorist coverage under his or her own policy.
Colby v. Metro. Prop. & Cas. Ins. Co., 420 Mass. 799 (1995). The same princi-
ple would apply to a loss-of-consortium claimant, whose recovery would be
limited to the policy covering the family member actually injured in the accident.
See Colby v. Metro. Prop. & Cas. Ins. Co., 420 Mass. at 804–06.

Recovery based on a claimant’s status as a household member applies only if he
or she does not have Massachusetts automobile insurance of his or her own. See
G.L. c. 175, § 113L; see also DePina v. Safety Ins. Co., 419 Mass. 135 (1994);
Smart v. Safety Ins. Co., 419 Mass. 144 (1994); Goodman v. Am. Cas. Co., 419
Mass. 138 (1994). In such a case, the claimant would be entitled to recovery
from the household policy that provides the highest limits of uninsured or under-
insured motorist coverage. G.L. c. 175, § 113L. If two or more policies qualify
as the policies providing the “highest limits” of coverage, each policy should
pay its pro-rata share. G.L. c. 175, § 113L. However, if a household member is
injured while occupying a vehicle owned by another household member and the
vehicles are insured by two different policies, the injured party may recover only
from the policy of the occupied vehicle, regardless of the limits. Chenard v.
Commerce Ins. Co., 440 Mass. 444 (2003).

Because corporations are legal individuals but are incapable of having household
members, in instances where the named insured is a corporate entity, no house-
hold member coverage applies. Andrade v. Aetna Life & Cas. Co., 35 Mass.
App. Ct. 175 (1993). Similarly, as corporations are incapable of sustaining bod-
ily injury, no uninsured/underinsured motorist coverage can be triggered for a
“named insured” under such policies. See Andrade v. Aetna Life & Cas. Co., 35
Mass. App. Ct. 175 (1993); see also Jacobs v. United States Fid. & Guar. Co.,
417 Mass. 75 (1994). But see Thattil v. Dominican Sisters of Charity, Inc., 415
Mass. 381 (1993) (nun qualified as named insured under Dominican Sisters’
policy based on unique circumstance that her identity “merged” with that of

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Dominican Sisters when she sacrificed herself to the order upon taking her vows).
These principles apply even in the case of small, closely held corporations con-
trolled by a single family or individual. See Thattil v. Dominican Sisters of Char-
ity, Inc., 415 Mass. 381 (1993). These principles also hold true where the listed
named insured is a trust, even if the claimant is both the trustee and a beneficiary
of the trust. Tartarian v. Commercial Union Ins. Co., 41 Mass. App. Ct. 731
(1996).

Finally, an occupant of the insured automobile should only be entitled to recover
uninsured/underinsured benefits under the policy insuring the vehicle involved in
the accident if he or she neither has a Massachusetts automobile insurance pol-
icy of his or her own, nor is covered under a Massachusetts policy issued to a
member of his or her household. G.L. c. 175, § 113L; Huyng v. Pilgrim Ins. Co.,
78 Mass. App. Ct. 1108 (2010) (unpublished decision; text available at 2010 WL
4573485). In instances where no liability coverage applies to the operator of the
occupied vehicle based on the operation of an exclusion to coverage, such an
occupant can nevertheless collect uninsured benefits under the policy covering
that vehicle, assuming that the policy is in force and had not previously been
cancelled. See Skinner v. Royal Ins. Co., 36 Mass. App. Ct. 532 (1994). How-
ever, the denial of a claim by the liability carrier based on its determination that
its insured was not legally responsible for the accident (as opposed to a “cover-
age” denial) does not trigger uninsured motorist coverage. Noel v. Metro. Prop.
& Liab. Ins. Co., 41 Mass. App. Ct. 593 (1996).

In addition, the broad exclusivity provision in the Massachusetts Workers’ Com-
pensation Act, G.L. c. 152, § 23, precludes an employee’s recovery of uninsured/
underinsured motorist benefits under an employer’s policy when the employee
was injured in the course and scope of his or her employment. Nat’l Union Ins.
Co. v. Figaratto, 423 Mass. 346 (1996); Spaneas v. Travelers Ins. Co., 423 Mass.
352 (1996); Berger v. H.P. Hood, Inc., 416 Mass. 652 (1993). Therefore, even if
the employee qualifies as a covered occupant because he or she has no Massa-
chusetts automobile policy and has no household members who have such a
policy, no uninsured/underinsured motorist recovery will pertain in these cir-
cumstances under the employer’s policy covering the vehicle involved in the
accident. Likewise, no uninsured/underinsured benefits apply under the em-
ployer’s policy for loss of consortium damages claimed by the employee’s family
members. Nat’l Union Ins. Co. v. Figaratto, 423 Mass. 346 (1996).

Finally, the Appeals Court has concluded that flight by the tortfeasor is not a
necessary element of a “hit-and-run” accident, ruling that uninsured motorist
benefits are available for a passenger injured in an accident in which “the [at-
fault] operator does not immediately flee but nevertheless leaves the accident
scene without being identified.” Commerce Ins. Co. v. Mendonca, 57 Mass. App.
Ct. 522, 526 (2003).

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AUTOMOBILE INSURANCE                                                           § 2.6


§ 2.6.2       Benefits Payable
Benefits payable under underinsured motorist coverage are limited to a maxi-
mum of the difference between the applicable limits of underinsured motorist
coverage and the amount collected from the tortfeasor’s liability coverage. Un-
der the terms of the statute, the tortfeasor vehicle qualifies as “underinsured”
only if the applicable limits of liability coverage are less than the claimant’s lim-
its of underinsured motorist coverage. If the operator of the responsible vehicle
has excess liability coverage available to him or her under a policy or policies
that are applicable in addition to the limits of coverage provided under the policy
insuring the involved tortfeasor vehicle, the limits of liability coverage available
under all policies covering the tortfeasor are to be added together in determining
whether underinsured motorist coverage is triggered. Gleed v. Aetna Cas. & Sur.
Co., 418 Mass. 503 (1994). The claimant’s consent to settle under only one of
multiple policies granted by the underinsured motorist carrier will not change
this rule. Gleed v. Aetna Cas. & Sur. Co., 418 Mass. 503 (1994). If joint-
tortfeasors are involved, the combined limits of coverage available to all respon-
sible tortfeasors must be less than the claimant’s limits of underinsured motorist
coverage in order for coverage to trigger. Hanover Ins. Co. v. Pascar, 421 Mass.
442 (1995). However, uninsured motorist benefits are available if the injury is
due to joint tortfeasors and one of the tortfeasors was an unidentified hit-and-run
driver. Gabriel v. Premier Ins. Co., 445 Mass. 1026 (2006). Finally, a tortfeasor
is not considered to be underinsured, and an injured claimant is not entitled to
underinsured motorist benefits, when the liability limits available to the tortfea-
sor are identical to the claimant’s underinsured motorist coverage limits, even if
the claimant received less than the tortfeasors’ “per person” limits because of
multiple claims exhausting the “per accident” limit. Hanover Ins. Co. v. Pascar,
421 Mass. 442 (1995); Alguila v. Safety Ins. Co., 416 Mass. 494 (1993); Fleur-
gin v. Safety Ins. Co., 416 Mass. 503 (1993); Safety Ins. Co. v. Laurent, 416
Mass. 500 (1993). Therefore, the amount of liability proceeds actually recovered by
the claimant is irrelevant to determining whether underinsured motorist coverage
is triggered.

In valuing the claimant’s damages under uninsured/underinsured motorist
coverages, the insurer is entitled to consider

      • workers’ compensation or similar benefits received by the injured
        party as a result of the accident;

      • personal injury protection or other “no-fault” benefits received by
        the injured party as a result of the accident; and

      • recovery obtained from any party responsible for the accident.


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Thus, an insurer is entitled to deduct all amounts of past and future workers’
compensation benefits from the value of a claim when determining what is owed
a claimant in the form of uninsured/underinsured motorist benefits. Mayo v.
Aetna Cas. & Sur. Co., 419 Mass. 596 (1995). In addition, an insurer is entitled
to reduce the value of the claim by the amount of PIP or “no-fault” benefits re-
covered by the claimant, even if such benefits are recovered under a policy is-
sued in a state other than Massachusetts. Amica Mut. Ins. Co. v. Bagley, 28
Mass. App. Ct. 85 (1989). However, benefits recovered by the claimant under
the medical payments coverage part of any Massachusetts automobile policy
may not be considered for purposes of reducing uninsured/underinsured motorist
benefits recoverable by the claimant. Allstate Ins. Co. v. Bearce, 412 Mass. 442
(1992). Furthermore, uninsured/underinsured motorist benefits are not subject to
liens asserted by health insurers. Meyers v. Bay State Health Care, Inc., 414
Mass. 727 (1993).

Underinsured motorist coverage, which is optional, does not apply to people
injured “while using an auto without the consent of the owner.” In Gordon v.
Safety Insurance Co., 417 Mass. 687 (1994), the Supreme Judicial Court held
that occupying a vehicle as a passenger constitutes “use” of the vehicle, and that
the claimant’s subjective knowledge is irrelevant in determining whether his or
her “use” of the automobile was “with the owner’s consent.” Gordon v. Safety
Ins. Co., 417 Mass. at 691. Therefore, anyone injured while occupying a vehicle
without its owner’s consent cannot recover underinsured motorist benefits. Be-
cause uninsured motorist coverage is compulsory, rather than optional, individu-
als injured in these circumstances may still recover uninsured benefits, but re-
covery is limited to the $35,000 per person/$80,000 per accident limits of cover-
age required to be offered pursuant to G.L. c. 175, § 113C, even if higher limits
of coverage would otherwise have pertained. G.L. c. 175, § 113C. Other exclu-
sions to underinsured motorist coverage include those applying to all optional
coverages, discussed in § 2.3, above, as well as claims for injuries sustained in
an automobile being operated in a racing, speed, or demolition contest or in prepa-
ration for such contest. See Massachusetts Automobile Insurance Policy 22 (Part
12, “Bodily Injury Caused by an Underinsured Auto”). See also § 2.3, above.


§ 2.6.3      Presentation of Claims
The insured must “promptly notify” the company of any accident and must do so
within twenty-four hours in the case of an accident involving a hit-and-run
automobile. These notice provisions have been held to be enforceable by the
Massachusetts Supreme Judicial Court. Royal Globe Ins. Co. v. Craven, 411
Mass. 629 (1992). However, an insurer must prove that it was prejudiced by the
failure to comply with the policy’s “prompt” notice provision in order to be re-
lieved of its obligations to provide underinsured motorist coverage. Goodman v.

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AUTOMOBILE INSURANCE                                                            § 2.6


Am. Cas. Co., 419 Mass. 138 (1994); Lighter v. Lumbermen’s Mut. Cas. Ins.
Co., 43 Mass. App. Ct. 415 (1997). This prejudice requirement most likely ap-
plies to uninsured motorist claims as well as underinsured motorist claims.
Prejudice is also required to negate uninsured or underinsured coverage based on
failure to comply with “consent to settlement” provisions. MacInnis v. Aetna
Life & Cas. Co., 403 Mass. 220 (1988).

Under the terms of Massachusetts automobile insurance policies, individuals
claiming uninsured/underinsured motorist benefits must also submit to inde-
pendent medical examinations or examinations or statements under oath at the
insurance carrier’s request. A claimant’s failure to submit to such examinations
may result in a forfeiture of coverage, regardless of whether the insurer can
show prejudice, as the policy’s requirements to submit to medical examinations
or examinations under oath arguably constitute conditions precedent to coverage
attaching. See Mello v. Hingham Mut. Fire Ins. Co., 421 Mass. 333 (1995) (in-
sured’s failure to submit to examination under oath under homeowner’s policy,
despite assertion of U.S. Constitutional privilege against self-incrimination, re-
sulted in forfeiture of coverage); see also Ferrante v. Pilgrim Ins. Co., 77 Mass.
App. Ct. 1115 (2010) (unpublished decision; text available at 2010 WL 3118699)
(insurer had right to its own examination under oath even if other insurer had
already conducted one); Morales v. Pilgrim Ins. Co., 58 Mass. App. Ct. 722
(2003) (upholding denial of uninsured motorist coverage where plaintiffs would
provide examination under oath only if other plaintiff was present in room dur-
ing questioning). However, the insurer must request the examination under oath
within a reasonable time after notice of the claim. See Lorenzo-Martinez v.
Safety Ins. Co., 58 Mass. App. Ct. 359 (2003) (holding that request for examina-
tion under oath made nine months after notice of claim—after seven prior re-
quests for a recorded statement—was reasonable, but that request for examination
under oath thirteen months after notice of claim was not made in a reasonable
time).

If the insurer and the claimant are unable to agree on issues of liability (e.g., the
purported tortfeasor’s negligence) or damages, those issues must be resolved
through arbitration. No defense to coverage or arbitration lies solely on the basis
that the claimant may have settled with the tortfeasor’s insurer for less than the
tortfeasor’s limit of liability coverage. MacInnis v. Aetna Life & Cas. Co., 403
Mass. 220 (1988). However, in such cases, the underinsured motorist carrier is
entitled to an offset reflecting the full amount of the tortfeasor’s available liabil-
ity coverage limit. MacInnis v. Aetna Life & Cas. Co., 403 Mass. at 228; see also
Pritzky v. Safety Ins. Co., 64 Mass. App. Ct. 751 (2005). All factfinding func-
tions involved in determining liability and damages are subject to the policy’s
arbitration clause. Employers Fire Ins. Co. v. Garney, 348 Mass. 627 (1965);
Allstate Ins. Co. v. Harris, 26 Mass. App. Ct. 1017 (1989). On the other hand,


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issues relating to the applicability or scope of insurance coverage must be de-
termined by the courts and are not subject to the arbitration clause. Employers
Fire Ins. Co. v. Garney, 348 Mass. at 632; Allstate Ins. Co. v. Harris, 26 Mass.
App. Ct. at 1019. Finally, arbitration awards that are paid within thirty days of
the arbitrator’s decision may not be confirmed as a judgment for purposes of
multiplication under G.L. c. 93A. See Mahan v. Arbella Mut. Ins. Co., 438 Mass.
1010 (2003); Scott v. Commerce Ins. Co., 62 Mass. App. Ct. 416 (2004); see also
Murphy v. Nat’l Union Ins. Co., 438 Mass. 529 (2003) (only interest may be
confirmed as a judgment).

An insured who intends to pursue an underinsured motorist claim should obtain
the consent of the insurer prior to settlement with the tortfeasor. Insurers con-
senting to settlement are nevertheless not precluded from contesting liability in
connection with the underinsured motorist claim. Furukawa v. Arbella Mut. Ins.
Co., 59 Mass. App. Ct. 142 (2003).

There is a six-year statute of limitations applicable to uninsured/underinsured
motorist claims. Goodman v. Am. Cas. Co., 419 Mass. 138 (1994). The six-year
period begins to run when the insurer either refuses to submit to arbitration or
denies the claim. Peerless Ins. Co. v. Boyle, 422 Mass. 1011 (1996); Berkshire
Mut. Ins. Co. v. Burbank, 422 Mass. 659 (1996).




MCLE thanks Karyn T. Murphy for her earlier contributions to this chapter.




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EXHIBIT 2A—Massachusetts Automobile Insurance
       *
Policy




*
    Reprinted with permission of the Automobile Insurers Bureau.


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