Smart Auto Insurance Blog

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.

An article by Kenneth J. St. Onge in the Insurance Journal says that Esurance auto insurance has filed to obtain a foreign company license, the first step in being able to sell Massachusetts auto insurance. The insurer is following Geico and Progressive who have also decided to enter the state’s market, a year after deregulation of the industry. Like those companies, Esurance sells auto insurance policies directly to the consumer through the Internet.

Despite this indicator, Kenneth stresses that the auto insurance company states that they have no plans to enter the Massachusetts market any time soon. For one thing, they have not yet filed a rate plan; such an outline of the auto insurance rates they plan to charge is mandatory to sell insurance in the state.

The Associated Press reports that GEICO has filed paperwork with the Department of Insurance and will begin selling auto insurance in Massachusetts.

GEIGO will be the second national auto insurance carrier to enter the Massachusetts auto insurance market since the state moved to “managed competition” last year, Progressive Insurance Company was the first.

Massachusetts was the last state to have their auto insurance rates set by state regulators before moving to a managed competition environment last year.

Here’s some great news for drivers with Massachusetts auto insurance: the state’s insurance commissioner, Nonnie Burnes, is no longer going ahead with her plan to shut down the appeals board. The Associated Press reports that her reversal comes after heavy criticism from the Massachusetts Attorney General, as well as the public.

The board, which was set to close on April 1st for new cases, allows motorists to appeal increased auto insurance premiums and added surcharges, levied when their insurance company determines them to be at fault in an auto accident. Annually, about 20,000 out of 50,000 drivers succeed in their appeals. Nonnie believes that despite that statistic, recent deregulation in the insurance market lets consumers buy auto insurance from a competitor if they believe their current insurer’s decision is unfair.

Major Northeastern insurer Plymouth Rock is offering several discounts on Massachusetts auto insurance, according to a recent press release.

To promote environmental consciousness, Plymouth has decreased auto insurance premiums for people who have “gone green” by driving fewer miles than the average in their area. This is similar to other auto insurance companies giving lower rates to drivers who do not use their cars for work commutes.

Inexperienced drivers, who normally have to pay more for policies, can save on their auto insurance rates by successfully completing a driving course from Driven Advanced Drivers Training. Plymouth Rock policy holders receive a 10% discount on the course.

In the Insurance Journal, it was reported that Attorney General Martha Coakley is wary of a potential entrant into the Massachusetts auto insurance market. Occidental Fire and Casualty Insurance Company recently filed its proposed rates for high-risk drivers, and they are 10% more expensive than average high-risk policies in the state.

Occidental also wants to charge several surcharges and fees that are either illegal in Massachusetts or considered unfair, including:

• A 35% surcharge for those unable to verify their driving records, including recent immigrants from non-English speaking countries who can’t get their records in English. That’s on top of the higher premium for inexperienced drivers.
• Drivers filing glass claims have to pay Occidental two deductibles: a comprehensive deductible and a separate glass deductible
• A fee of $25 tacked onto each initial policy purchase
• Fees of $8 per installment

In addition, Occidental does not allow drivers to reinstate their auto insurance policies after being canceled for nonpayment, which is against Massachusetts law. (Buying a new policy after having one canceled results in more costly auto insurance premiums.) Coakley is especially concerned because Occidental is targeting inner-city communities, where residents tend to have fewer auto insurance options.

As of April 1st, Massachusetts auto insurance customers will no longer be able to appeal surcharges on their premiums if they are found at fault in an accident, reports Ron Sanders of WBZ. The state’s insurance commissioner wants to eliminate the Auto Insurance Appeal Board, the only one of its kind in the nation, because of inefficiencies and high costs. Instead, auto insurance companies themselves will be allowed to review appeals.

Ron says that legislators are fighting to keep the appeal board active: almost half of Massachusetts drivers win their appeals, saving them $25 million each year. They worry that insurers will be unfairly biased towards rejecting appeals, although the insurance commissioner counters that people can shop around for auto insurance quotes and switch their provider if they are unhappy with the results.

In a Boston Herald editorial, it’s said that auto body shops in Massachusetts are petitioning the state legislature for higher pay from insurers. They are asking that the state require a price floor; body shops would have to charge a minimum labor rate, and Massachusetts auto insurance providers would be required to pay no less than that minimum hourly rate for covered repairs.

The body shops claim that such legislation is necessary in order to keep up with inflation of their actual costs, and point out that their average rate is already under the national going rate for auto repairs (although insurance companies snap back that Mass. body shops also take more hours to fix a car than the national average, evening things out). Such a law would be likely to increase auto insurance premiums for consumers.

According to Jeffrey Krasner in the Boston Globe, Progressive Insurance’s website recently showed incorrect comparisons with other auto insurance companies, making their rates appear cheaper than they really are. A computer glitch compared the price of Progressive’s 6-month policy with 12-month policies from Commerce Insurance or Liberty Mutual. (Unlike most Massachusetts auto insurance companies, Progressive sells policies in 6-month increments.)

Progressive spokesperson Cristy Colt stresses that they weren’t intentionally trying to mislead consumers; rather, the system is meant to divide competitors’ prices in half to show fair auto insurance quote comparisons. For now, the rate comparison tool on their website is down, and Progressive is sending letters to inform about 21,000 consumers whose decisions may have been affected by the error.

(Photo credit: wallyg under CC 2.0)