Smart Auto Insurance Blog

According to the article “Five Auto Insurers Must Recalculate Customer Bills” by Johnny Diaz on boston.com, the Massachusetts Attorney General settled with 5 Massachusetts auto insurance companies that might have charged higher rates to policy holders because of driving record information that was inaccurate.

The state of Massachusetts says the auto insurance companies failed to update at-fault information reported to The Comprehensive Loss Underwriting Exchange.  This is a private database which is used to determine driving histories.  The error may have resulted in higher premiums for some of the customers with these 5 companies.

The auto insurance companies will need to pay the state over $100,000 within 10 days as part of the settlement.  They also must identify affected customers within 120 days and recalculate their rates.  If this problem was not caught as soon as it was, quotes on auto insurance may have been inflated for these certain customers for years to come.

According to the article “AG Finds Herself on 2 Sides of a Dispute” by Bruce Mohl on boston.com, the Massachusetts Attorney General Martha Coakley is defending something she criticized not too long ago.  She is the state’s top lawyer and is defending Governor Patrick’s Administration against a lawsuit that’s saying some of the state’s auto insurance rules unfairly favor national companies coming to the MA market, such as Progressive Auto Insurance. There has also been some criticism of the way Massachusetts auto insurance quotes are determined.

The interesting thing is that this same attorney general has been known to criticize the same regulations.  She has been a representative of consumers on auto insurance debates and released a report just before the holidays that stated her belief that the managed competition auto insurance system is not saving MA drivers money.  She also accused Governor Patrick of playing favorites when determining auto insurance rules.

She basically argued in court that state officials are acting reasonably in making the auto insurance rules, but just weeks ago accuses them of playing favorites. It will be interesting to see how this plays out and if her two-sided judgement affects her defense.

According to the article “AG Urges Changes In Auto Insurance” by Robert Weisman on boston.com, Massachusetts Attorney General’s office issued a report claiming that managing competition in the auto insurance system, started back in 2007, is not working.

The new system has attracted more auto insurance companies to the state, but Massachusetts auto insurance quotes are starting to factor in socioeconomic factors that aren’t related to driving record and this is concerning many.  The AG also faults the state Division of Insurance for not providing data to compare auto insurance quotes and make it easier for Massachusetts residents to shop around.

Attorney General Martha Coakley is afraid that consumers are not getting the best deal on their auto insurance rates.  She wants to initiate a few changes to better the system, such as requiring insurance companies to justify their discount rating system when determining their auto insurance quotes.  She would also like a Massachusetts website made readily available to residents to compare MA rates easily online.  The new system has showed mixed results, so it’s still to be determined how everything will pan out.

There is some concern for those with Massachusetts auto insurance, that insurers may be able to use credit scores and profession when determining one’s auto insurance rates.  According to Jon Chesto’s article “Auto Insurance Agents Push for Ban on Using Socioeconomic Factors” on tauntongazette.com, many other states use credit scores as an auto insurance rate factor. 

The article also discusses the debate going on now between insurers and consumers.  President of the Massachusetts Association of Insurance Agents, Frank Mancini, is worried that the ban to use credit scores might not survive through the next commissioner.  Because of this, his organization testified at the State House in favor of a movement that would ban the use of these certain factors as state law.

The Massachusetts Association of Insurance Agents believe that insurance rates should only be based on driving record, location, and how long someone has been driving.  This is how it worked under Massachusetts previous, highly regulated auto insurance system.  Most states allow factors such as education, credit scores and occupation when insurers calculate an auto insurance quote, and many feel this is unfair to consumers.

The average auto insurance rate in Texas has decreased by more than 14% since the beginning of 2009 according to insurancerates.com.  This was found on the press release “Texas Auto Insurance Rates Decline 14.2 Percent in 2009″ on marketwire. 

This is good news for Texans as all Americans are trying to save money.  Texas auto insurance quotes are lower and by shopping around you can find competitive rates.  Some other statistics to keep in mind while shopping around are that men in Texas have an average auto insurance rate which is 7% higher than women according to the press release.  Drivers in Texas who are 19 years old or younger pay an average of 140% higher than drivers over the age of 75. 

The press release also points out that Texas is currently the 18th most expensive state for auto insurance so the decreasing rates are helpful.  Massachusetts auto insurance is the most affordable and Louisiana is the most expensive.  The best thing that you can do to ensure you are getting a good deal on your auto insurance is to shop around and compare rates.  You may be surprised how much money you end up saving.

According to the article “Massachusetts Police Arrest 13 in Auto Insurance Fraud Case” from Claimsjournal.com, 13 people from Lawrence and Methuen have been charged with auto insurance fraud.  This is in connection to what police believe to be a staged accident where over $76,000 was paid out.

Lawrence Chief John Romero told The Eagle-Tribune that it is the largest group of people charged in connection with one incident since they started focusing on auto insurance fraud 6 years ago.  This crackdown was prompted by the death of a great-grandmother in a staged crash in 2003.

Ten of the thirteen charged say they were in a van that was hit on a ramp  in North Andover in May ‘03. The runner who allegedly set up the incident and the driver of another vehicle that hit the auto were charged as well.  It’s this kind of illegal behavior that ends up affecting everyone’s auto insurance rates.

According to the article “Car insurance rates fall 8%, state says” by Todd Wallack in the Boston Globe, Massachusetts auto insurance rates have fallen since they stopped setting their own rates back in 2008.  This information was obtained from the Division of Insurance.

The state study shows that auto insurance rates have dropped 8.2% from April 08 to April 09.  The rates also fell 5.2% from 06 to 07.  In April of 2008 Massachusetts started allowing auto insurance companies to set their own rates which was to create managed competition.  Before this rates were highly regulated. 

Jason Lefferts, for the insurance division, said that the study also found that during the last year the number of uninsured cars in MA fell and that less people were placed in the high-risk driver category.  Since the change in regulation 9 auto insurance companies have entered the Massachusetts auto insurance market.

Following up on a previous blog post announcing GEICO filing paper work to begin selling auto insurance in Massachusetts, last Monday GEICO went live, and is now actively selling Massachusetts auto insurance policies to MA residents.

GEICO’s first customer in MA was Beth Opishinski of Whitman, Mass.

Over the past year, Massachusetts has seen many of the nations leading auto insurance companies re-enter the auto insurance market providing them with more options when choosing an auto insurance policy.  Recent market entrants include Progressive Insurance Company, Esurance, GEICO, and Allstate will join the fun shortly.

Allstate stopped selling auto insurance in Massachusetts back in 1988 because of the auto insurance environment being extremely regulated.  But with the state’s recent system change back in April of 2008, Allstate would like to serve Massachusetts again.  The new system allows more flexibility for customers and a greater competition between auto insurance companies. 

Massachusetts is currently the only state that Allstate does not serve so this comes as a great opportunity for them.  The targeted date to offer products to customers would be November 2, 2009 assuming they are successful with the Massachusetts Division of Insurance. It will be important to shop around for auto insurance at this time if you live in MA, and of course all drivers should be shopping to ensure they have the best rate.

According to 90.9 WBUR, The Urban Insurance Agents of Massachusetts (A trade association) say that over the next year more than 12,000 drivers per month who mostly live in urban or inner-city areas will lose their auto insurance coverage due to auto insurance deregulation otherwise known as managed competition.

Auto insurance companies in Massachusetts are no longer required to offer auto insurance coverage to neighborhoods they consider to be high-risk such as: Brockton, Springfield, Worcester, Dorchester, and Roxbury among others.

Massachusetts Drivers who are non-renewed can shop for auto insurance through an agent, online or through their own research in the competitive Massachusetts marketplace…or through the Massachusetts Auto Insurance Program (MAIP).

More information about Massachusetts Auto Insurance, and online quotes.