What Happens In a Massachusetts Car Accident Case that Involves an Out-of-State Policy?

Massachusetts residents often travel to nearby states, and several out-of-state drivers make their way to Massachusetts. If an accident occurs in Massachusetts, and the at-fault party has an out-of-state policy, the question of which law applies may arise in a personal injury action, especially if there’s a difference in the required minimum coverage. Individual states each have their own car insurance policy requirements that dictate minimum amounts of coverage. Individual insurance companies have uniquely written policies that comply with the state in which they are licensed. As medical bills add up, maximizing the amount paid by an insurance company can mean saving thousands of dollars, and a judicial determination of which law applies can affect how much is paid out of pocket.

A Massachusetts state appellate case, Clarendon Nat’l Ins. Co. vs. Arbella Mutual Ins. Co., provides an example of how state courts handle this situation. In this case, a woman was driving a loaner car from her dealership when she had a car accident with four other vehicles. The loaner car was covered by an insurance policy in Rhode Island. When there are two competing laws that could apply to a car accident, the forum state’s conflict-of-laws rules choose which state’s law is applicable. The accident in Clarendon occurred in Massachusetts, so the court looked to Massachusetts case law and the Restatement of Conflict of Laws to determine whether Massachusetts or Rhode Island insurance law applied.

The court determined the first consideration should be the principal location of the insured risk, or which state would be the likeliest place an accident would occur, unless another state has a more significant relationship. The court felt that greater weight should be placed on the principal location of the insured risk, if it was primarily in one state. Even though the principal risk of the loaner car was in Rhode Island, the woman’s primary insurance through a Massachusetts insurance policy had a principal risk in Massachusetts.

To aid in this resolution, the court looked to the insurance contract laws of each state.
Rhode Island law favored coverage over no coverage, and Massachusetts law favors reconciliation of conflicting terms that effectuate the language of the insurance agreements. The court felt that choosing Massachusetts law would cover the intentions of both states’ insurance laws. The Massachusetts Court of Appeals upheld the lower court’s ruling to apply Massachusetts law to the interpretation of the policy.

When you’ve been injured in a car accident, sorting through the complicated language of laws and insurance contracts is likely the last thing you want to worry about when you are recovering. While cases like Clarendon shed some light on what courts consider with out-of-state policies, each case presents its own unique challenges. The experienced Massachusetts car accident attorneys at the Law Office of James K. Meehan have the legal knowledge you need to maximize the recovery you deserve. For a free, confidential consultation, contact our office today at 508-822-6600.

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