If you have been seriously hurt in a car accident and the other driver’s insurance is not enough to cover your losses, you may be counting on your own underinsured motorist settlement in Massachusetts to fill the gap.
But there is a hidden procedural rule in your auto insurance policy that could wipe out that coverage entirely. It is called the “consent to settle” clause, and it catches injured people off guard every day in Massachusetts.
If you accept a settlement from the at-fault driver’s insurance company without first getting written permission from your own insurer, you could permanently lose your right to pursue a UIM claim after settlement—even if you paid for years of underinsured motorist coverage and regardless of whether your injuries are worth far more than what the other driver’s policy paid you. Contact Bailey & Burke today for a free consultation.
Key Takeaways about an Underinsured Motorist Settlement in Massachusetts
- Standard Massachusetts auto insurance policies contain a consent to settle clause requiring written permission from your own insurer before accepting any settlement from the at-fault driver.
- Failing to follow this step can permanently void underinsured motorist (UIM) benefits, regardless of injury severity.
- The consent to settle requirement exists because your insurer has a legal right called subrogation, allowing it to recover money from the at-fault driver after paying your UIM claim.
- Many drivers carry only the minimum bodily injury limits, leaving accident victims underinsured and making UIM coverage critical.
- The exhaustion of policy limits in MA is often a triggering event for UIM claims, but it must be handled with proper notice.
- UIM disputes in Massachusetts are resolved through binding arbitration, not a traditional court lawsuit.
What Is the “Consent to Settle” Clause in Your Auto Insurance Policy?
Almost every auto insurance policy sold in Massachusetts includes a consent to settle clause that auto insurance policy holders rarely know about until it is too late. In simple terms, this clause says that before you accept any money from the at-fault driver’s insurance company, you must notify your own insurance company in writing and get their approval first.
This is not just a suggestion or a formality. It is a strict contractual requirement. If you skip this step, your own insurer can deny your UIM claim entirely.
Why does your insurer care whether you settle with the other driver? It comes down to subrogation. Under Massachusetts General Laws Chapter 175, Section 113L, when your insurer pays you UIM benefits, they gain the legal right to pursue the at-fault driver to recover what they paid you.
If you settle with the at-fault driver and give them a full release without your insurer’s knowledge, you destroy your insurer’s ability to exercise that right. From the insurance company’s perspective, you just gave away their leverage. And the policy says they do not have to pay you UIM benefits if that happens.
How a $25,000 Settlement Can Cost You Hundreds of Thousands
Picture a common situation on Massachusetts roads. You are driving through Clinton on Route 62 near the Wachusett Dam when another driver runs a red light and hits you broadside. You suffer a herniated disc, a torn rotator cuff, and face months of physical therapy. Your medical bills are climbing past $80,000, and you have not been able to work.
The at-fault driver carries only the state minimum for bodily injury liability, which, as of July 1, 2025, is $25,000 per person. Their insurance company offers you the full $25,000.
Here is where the trap springs. You need money. You are behind on bills. You sign the release and accept the check. But you also carry $100,000 in UIM coverage on your own policy. So, you call your own insurer to file your underinsured motorist claim for the remaining $75,000 your injuries are worth.
And they deny it. Because you never sent them a written notice of the proposed settlement and never got their consent before signing that release. Your policy’s consent to settle clause gives them the legal right to refuse your claim. You lost $75,000 or more in benefits you paid for because of a procedural step nobody told you about.
Why Your Insurance Company Has the Right to Say “Wait”
It might feel unfair, but the consent to settle requirement serves a specific legal purpose. When you carry UIM coverage, your insurer has a financial stake in how the at-fault driver’s claim is resolved. Here is why your insurer needs to be involved before you accept any settlement:
- Subrogation rights. After paying your UIM claim, your insurer can seek reimbursement from the at-fault driver. If you release the at-fault driver from all liability, your insurer may lose that right entirely.
- Evaluating the at-fault driver’s assets. Your insurer may want to investigate whether the at-fault driver has personal assets beyond their insurance policy. Settling too quickly could mean leaving money on the table.
- Confirming exhaustion of policy limits. Your insurer needs to verify that the at-fault driver’s policy limits have truly been exhausted before UIM coverage kicks in. The exhaustion of policy limits in MA is a threshold requirement for most UIM claims.
- Preserving the right to intervene. In some cases, your insurer may choose to pay you directly and then pursue the at-fault driver on their own, which can actually result in a faster resolution for you.
Knowing the “why” behind the rule can help you avoid falling into the trap.
The Step-by-Step Process for Protecting Your UIM Claim
Pursuing a UIM claim after settlement with the at-fault driver is possible, but only if you follow the right steps in the right order:
- Do not sign anything from the at-fault driver’s insurer yet. No matter how tempting the offer, do not sign a release or accept a check until you complete the steps below.
- Notify your own insurance company in writing. Send a formal letter explaining that the at-fault driver’s insurer has offered to settle at their policy limits. Include the amount and the policy limit.
- Request written consent to settle. Ask your insurer to approve the settlement in writing. Keep copies of everything.
- Wait for a response. Your insurer will review the proposed settlement and either grant consent or exercise their right to pay you the settlement amount directly, which preserves their subrogation rights.
- Only after receiving written consent should you sign the release and accept the at-fault driver’s payment.
Following these steps protects your right to then pursue your underinsured motorist settlement in Massachusetts for the difference between what the at-fault driver paid and what your injuries are actually worth.
What Happens When Your Insurer Refuses to Give Consent?
Sometimes your own insurer will not grant consent to settle. This does not necessarily mean you are stuck. Under the standard Massachusetts auto policy, if your insurer refuses consent, they typically must pay you the settlement amount themselves, protecting your UIM rights while preserving their subrogation claim.
If your insurer refuses consent and does not offer to advance the settlement amount, you may have grounds for a bad faith insurance claim. Massachusetts law under M.G.L. Chapter 176D prohibits unfair claim settlement practices, including unreasonable delays and failures to settle claims promptly when liability is clear.
A refusal to consent is not the same as losing your UIM benefits. It just means the process takes a different path, and having a knowledgeable attorney involved makes a significant difference.
How UIM Claims Work Differently Than Regular Injury Cases
Underinsured motorist claims in Massachusetts are not handled the same way as a typical car accident injury case. There are several key differences:
- UIM claims go to arbitration, not court. If you and your insurer cannot agree on the value of your claim, a neutral arbitrator hears the evidence and makes a binding decision.
- The six-year statute of limitations applies. Because UIM claims are based on your insurance contract rather than personal injury law, the deadline is six years from the date of the accident, not three.
- Your recovery is offset. If the at-fault driver’s insurer paid you $25,000 and your UIM limit is $100,000, the most you can collect from UIM is $75,000.
- Anti-stacking rules apply. Massachusetts law generally does not allow you to combine UIM coverage from multiple vehicles or policies.
What matters most is that you do not accidentally give up your right to file the UIM claim in the first place by skipping the consent to settle step.
Situations Where the Consent to Settle Trap Is Most Dangerous
Certain circumstances make it more likely that someone will fall into this trap:
- Low-limit at-fault drivers. When the other driver carries only the $25,000 minimum, their insurer often offers the full amount quickly, pressuring you into signing before you think about UIM coverage.
- Catastrophic injuries with mounting bills. The temptation to accept any available money when you cannot work is powerful, but accepting prematurely could cost you far more.
- Multiple parties or rideshare accidents. Accidents involving more than one at-fault driver or rideshare companies like Uber or Lyft create layered insurance scenarios where the consent to settle process becomes even more critical.
- Hit-and-run situations. If the at-fault driver is later identified and has minimal coverage, the transition from an uninsured to an underinsured claim must be handled carefully.
In all of these situations, acting too quickly without proper legal guidance can permanently destroy valuable coverage.
FAQs for Underinsured Motorist Settlements in Massachusetts
Can I claim more money from my own insurance after the other driver pays me?
Yes, if you carry underinsured motorist coverage and the at-fault driver’s policy limits were not enough to cover your full damages, you can file a UIM claim with your own insurer for the difference. However, you must get your insurer’s written consent before accepting the other driver’s settlement, or you risk losing your UIM benefits entirely.
How long do I have to file a UIM claim in Massachusetts?
UIM claims in Massachusetts are based on contract law and carry a six-year statute of limitations from the date of the accident. This is longer than the three-year deadline for most personal injury lawsuits, but you should not wait to begin the process.
What does “exhaustion of policy limits” mean?
Exhaustion of policy limits in MA means the at-fault driver’s insurance has paid out the maximum amount available under their bodily injury liability coverage. This is typically a prerequisite for filing a UIM claim, because underinsured motorist coverage only kicks in when the at-fault driver’s insurance is insufficient.
Do I need to go to court for a UIM claim?
No. In Massachusetts, UIM disputes are resolved through binding arbitration, not through the court system. An arbitrator reviews the evidence from both sides and issues a final decision. This process is generally less formal than a trial but is still legally binding and can only be appealed in very limited circumstances.
What happens if my insurance company ignores my notice of proposed settlement?
If your insurer fails to respond to your notice within a reasonable time, you may have grounds for a bad faith claim under Massachusetts consumer protection laws. Insurers have obligations to handle claims fairly and promptly, and unreasonable delays or silence can be a violation of those duties.
Can my insurer reduce my UIM payment based on what the other driver already paid?
Yes. Massachusetts law requires that any amount you receive from the at-fault driver’s bodily injury coverage be subtracted from your UIM coverage limit. For example, if you have $100,000 in UIM coverage and collected $25,000 from the at-fault driver, the maximum additional UIM benefit you could receive is $75,000.
Talk to a Massachusetts Personal Injury Attorney About Your UIM Claim
Bailey, Michael J., Personal Injury Lawyer in Massachusetts
The consent to settle clause is just one of many procedural traps that can cost injured people the compensation they deserve.
If you have been hurt in a car accident and the other driver’s insurance is not enough, the Law Offices of Bailey & Burke can help you understand your UIM rights and take the right steps to protect your claim. We have been proudly serving families in Clinton, Worcester, Fitchburg, and Leominster since 1971, and we charge no fees unless you win. Contact Bailey & Burke today for a free consultation.