Boston Globe


Is Competition In The Insurance Industry Benefiting Massachusetts Drivers?

car

In 2008, the auto insurance market in Massachusetts was deregulated resulting in major changes for both consumers and insurance carriers alike. As more carriers began to write policies in the state, prices initially dropped.  However, prices have since rebounded and now closely resemble what consumers were paying before the industry was deregulated, according to data from the state Division of Insurance.  The question then arises; Is competition in the industry actually benefiting Massachusetts residents?

Recently, an article titled “Auto Insurance Rates Bounce Back Up In Mass.” was published in the Boston Globe.  The article was written by Deirdre Fernandes and she tries to determine whether or not consumers are benefiting from competition in the auto insurance industry by studying year-to-year comparisons of auto insurance premiums.  Before deregulation, insurance carriers typically had the same prices and offerings for their consumers, prompting larger carriers to avoid writing policies in Massachusetts due to the strict regulation of the industry.

After the deregulation, larger carriers such as Progressive and Geico began writing policies with extremely low premiums, forcing established carriers to lower their prices in order to maintain their business.  Since then, prices have risen as these larger carriers have become more familiar with paying out claims in the state. However, it is important to note that according to Fernandes’ article, repair costs and medical costs (all of which factor into claim payouts) are increasing faster in Massachusetts than across the nation as a whole, which also affect premium prices.

In her article, Fernandes quotes Deirdre Cummings, legislative Director of the Massachusetts Public Interest Research Group who said “If you look at rates and rates are going higher, that’s not in the consumer’s favor.”  Fernandes also plays devil’s advocate by acknowledging the fact that because insurance carriers are no longer regulated, they are able to offer unique services to their customers such as roadside assistance and specific discounts relating to bundling policies together, good student discounts, annual mileage discounts, etc.  Fernandes then quotes Massachusetts Insurance Commissioner Joe Murphy who says “It’s clear that the change in regulation has been a win for consumers”.

While Fernandes does address both sides of the argument, Joe Murphy takes issue with her analysis and wrote a response to her article.  In it, he states “Year-over-year comparisons of auto insurance premiums do not provide a sound foundation for commentary about rate levels or the general health of the insurance market.”  Essentially he argues that the increase in competition gives consumers the power to shop around if their premium does increase, making carriers compete for their business.

The competition also encourages insurance carriers to keep their own profits down so that they can keep premiums as low as possible.  In his response, Murphy says “In the five years prior to 2012, auto insurers in Massachusetts reported virtually zero profit from underwriting, the lowest of any New England state during that same period.”

One of the most important things to take away from both articles is that while insurance premiums may be about the same as they were before deregulation, consumers now have options and the ability to shop around if their premium does go up.  The power is in the hands of the consumer, and they are able to purchase policies not only based on price, but also based on coverage, available discounts, additional services, and much more.

As an independent agency, we are proud to work with many top-rated insurance companies including Commerce, Plymouth Rock, Arbella, Progressive, Safeco, Travelers, and Occidental.  We give our customers options when it comes to purchasing their policy and are unbiased in the quotes we provide. Our goal is to find Massachusetts residents the policy that is right for them.  So, if you’re looking to compare auto insurance rates in Massachusetts and find the best policy for you, get a free quote at MassDrive.com!  Our insurance agents are extremely knowledgeable and will work to find the policy that is right for you!

Photo By: TheBusyBrain

75 ThanksGiving Drivers & OUIs

The winter holidays are a stressful time for many, but don’t let the hustle and bustle lead to bad driving decisions. The Massachusetts Public Safety and Securities reported making 171 total arrests Thanksgiving Thursday through Sunday, November 28th. Of the total 171 arrests, 75 have been reported as OUIs – 71 under the influence of alcohol and 4 under the influence of other narcotics.

Neighboring New Hampshire officials arrested 33 drivers for driving under the influence of alcohol. The New Hampshire Operation C.A.R.E. (Combined Accident Reduction Effort) program stopped 3,519 drivers, almost 1,000 of which were cited with speeding according to the Boston Globe.

The holiday season brings increased patrols, even more reason to drive carefully in this winter wonderland. An additional 13 State Police patrolled the roads from late Wednesday through early Thanksgiving morning. With Christmas and other December holidays around the corner, think twice before drinking your eggnog.

Twenty-Six Billion Dollar Bill: Passed

The traditional six week congressional recess was interrupted yesterday when House members gushed back to Capitol Hill voting on a measure the Senate passed just last week. The Senate, House and President have now approved a bill for a $26 billion plan that will provide additional aid to states, including an additional $655 million for Massachusetts. These additional funds are expected to help prevent states and local governments from laying off hundreds of thousands of teachers, firefighters, and police officers.

Governor Deval Patrick stated yesterday the $655 million allocated to Massachusetts will be divided as follows:

  • $200 million for education programs in the state
  • $75 million for state colleges & universities
  • Remaining funds will be used to “fully fund” Chapter 70 state aid to local schools

The votes cast for this piece of legislation closely followed political party lines – only three Democrats voted against it and two republicans for it. The final count of 247 – 161 confirmed the bill’s pathway to the President’s desk where it was signed only a couple hours after passing through the House vote.

On a national level the new bill will provide $16 billion to offer increased Medicaid payments to states. This increase in funding will allow additional funds to be re-routed into other areas of the budget. According to an article by the Boston Globe advocates of the legislation have estimated this measure to keep more than 150,000 police officers, fire fighters and other public employees on payrolls. It has also been estimated this bill would decrease the deficit by 1.4 billion over the next 10 years.

Although the bill has been passed into law, much opposition remains. Businesses and Republicans have objected to $0 billion that would be raised via raising taxes on certain US-based multinational companies. Additionally Democrats and advocates of the bill are irritated over the plan to phase out an increase in food stamp payments. We will need to wait and see how this measure affects America and what obstacles lie ahead.

DOT Highway Division – Interview with Luisa Paiewonsky

The Massachusetts Department of Transportation‘s Highway Division was formed from a merger of the Massachusetts Highway Department and the Massachusetts Turnpike Authority. After the merge Luisa Paiewonsky has overseen the joined organizations and was previously the highway department commissioner. Eric Moskowitz, a reporter of the Boston Globe, has recently interviewed Paiewonsky bringing Massachusetts drivers a better understanding of just what’s happening with our representatives and roads.

Q. What does your job entail?

A. I am responsible for running the state highway system, and the highway division that has jurisdiction over the state highway system. That includes a little over 10,000 lane miles of roads. We have responsibilities for a little under 5,000 bridges, and we have 3,300 employees working from the Berkshires to Cape Cod and the Islands. We are responsible for everything from interstate highways to a number of biking paths, timber bridges, large roads, small roads, everything in between. And that includes not only building and maintaining them but clearing them of snow, cutting the grass, and preserving the bridges.

Q. How much is spent on construction and how much on maintenance?

A. Last year we spent $771 million on construction and we probably spent another $150 million on maintenance. We would always love to spend more on maintenance, because it’s the most efficient way to use the dollars. It buys more service life out of roads and bridges.

Q. I understand that construction spending has more than doubled in the last few years. What are the reasons?

A. The first is Governor Patrick, as one of his first acts in office, greatly expanded our construction budget on the rationale that we had a large number of backed-up projects, and highway construction creates a lot of jobs. So that was a major infusion of dollars into our core program, the Statewide Road and Bridge Program.

About a year and a half later he signed the Accelerated Bridge Program [after the Minnesota bridge collapse]. That gave us $3 billion over eight years to improve the safety and condition of bridges across the state. And then the following year we got almost $450 million in stimulus funds.

Q. What’s something we learned from another state, and how do we rate nationally?

A. The most important measure is that we have the safest roads in the nation [measuring fatalities per vehicle miles traveled], but we’re not even satisfied with that. We want to reduce fatalities even further. We’re just ending a four-year program to reduce fatalities by 20 percent, and we will hit that target at the end of this year, and then we’re going to set a new goal.

Our interstate highways are in the top 12 nationally for pavement condition. We’d like to improve the condition of our other national highway system roads. I think we’re well known for being a multimodal state DOT in that our highway design guide is one of the best in the nation for welcoming bicyclists and pedestrians.

Many people in the Highway Division can’t take a trip on vacation or for business or any other reason without looking at other states’ roads or bringing back ideas.

I noticed traveling up to Maine that they had street signs on overpasses to help drivers know where they were. So we decided to not only add street names to the overpasses but the towns. And that’s a very small investment that provides a large service to millions of people a day.

For the full interview please visit Boston.com.

Massachusetts rejects health care hikes

The state Division of Insurance denied 235 of 274 increases proposed by insurers.  The requested premium increases were for plans covering individuals and small businesses.

The denial of the insurers proposal marks the first time the state has turned down health premium increases.

Jay McQuaide, vice president of the state’s largest health insurer, Blue Cross and Blue Shield released this statement,

“We share the concern about rising health costs, but we don’t think government price controls will solve the problem”

Insurance Commissioner Joseph G. Murphy found that most of the base rates proposed by state health plans were “unreasonable relative to the benefits provided,” according to a statement issued by the agency.

Further information on this story can be found in the original article in the Boston Globe.

Progressive Falls Behind

Flo, the popular Progressive personality, will bring higher premiums with her quirky commercials and price zapping gun this quarter. Progressive entered the Massachusetts auto insurance market two years ago with rates attractively lower than most competitors. The lower premiums however have not endured as Progressive raises their rates for a fourth time since their debut in 2008. The new price increase of 6.63% will raise prices a grad total of about 16% over the last two years.

Andrew Quigg, a Progressive executive in charge of the company’s Massachusetts business states,”We’re still very competitive… Thousands of consumers still shop around and find us to have the lowest cost for auto insurance.” Even so, Progressive has become less and less attractive to the Massachusetts driver as time continues to provided a history of constantly increasing premiums. If these price increases continue to follow their repetitive pattern, Quigg’s statement is unlikely to remain true for long.

Insurance commissioner Joe Murphy told the Boston Globe he believes the deregulated auto insurance market, “has been wildly successful.” And successful it has been. The Massachusetts Division of Insurance reports drivers saved $270 million in the first year of deregulation. Eleven new insurance carriers have entered the Massachusetts auto insurance market since the new system emerged. Before deregulation insurance rates were set by the government and depended upon the driver’s location and driving record only. The new market allows insurance carriers to offer discounts from holding a AAA membership to owning a home. Deregulation holds great potential savings for drivers state wide.

Some critics of the newly deregulated system find it difficult to compare prices through the plethora of new auto insurance carriers. Adjusting to a new system may difficult for some, however it does not have to be difficult for you. MassDrive Direct Auto Insurance understands you have better things to do with your time than compare auto insurance quotes while understanding it is an important process. Here at MassDrive we quickly gather your basic information and compare auto insurance quotes for you!

No longer will you need to worry about comparing rates, coverages between quotes, or stress about discounts – MassDrive has your back. We compare quotes through various Massachusetts insurance carriers helping you find the best price and saving you time. One carriers may offer discounts another does not, in comparing your information through various carriers we help you get the most bang for your buck. And the best part? The quotes are completely free! Give MassDrive a call, one of our friendly representatives will compare your quotes saving you time and money.

New Emission Free Vehicle: Villager LSV

Judeth Van Hamm and Michael Connelly driving their new completely electric, zero emission Villager.

(Boston Globe, “Slowly Does If for a Cleaner Way of Living“)

The new Street Villager LSV, much resembling that of a golf cart, is the new emission free way to get around town. Driving on roads with a speed limit of 30 mph or less these nifty vehicles carry up to four adults, never stopping for gas. The Villagers can go about 20 miles before needing to be recharged. Making it the ideal around town and short trip vehicle for city drivers. Each of these earth friendly vehicles are are estimated to cost about $10,000.

These golf cart like contraptions were made street legal in Massachusetts as of December 2008. Over half the United States have created laws permitting these low speed vehicles to drive on regular city roads. These laws are created with restrictions of course,  keeping the Evil Kenevil’s out there from driving along highways. Massachusetts law, for example, prohibits these types of vehicles from driving on roads with posted speed limits above 30 mph.

Extensive accessories from a custom dashboard to a radio and additional mirrors are available for the environmentally friendly vehicle. Qualifying Villager drivers will receive a tax credit based upon the vehicle invoice price, an estimated $880 to $1,300 credit. Although the weather may still be a little chilly for driving around town, expect to see more on the road as we near the summer season.

Massachusetts Laws On Temporary License Plates

Have you ever noticed a driver in front of you has stuck a pair of home made license plates on their bumper? This may be for numerous reasons from an accident to simply falling off. However if someone drives without a license plate, or one mangled to the extent it is unreadable, you can be sure a ticket for improper display is soon to follow.

Let’s say a driver has just experienced an accident resulting in illegible license plate. The vehicle is fine, only slight cosmetic damage has been done. Our driver has immediately applied for new plates from the RMV, as any driver without a license plate or an illegible plate should do. The plates however will not arrive for another four to six weeks! The driver works across Boston from his home and can not miss work tomorrow, much less for the next four weeks. In the mean time our driver must create a temporary plate. What are the requirements for this make shift license plate? Ann Dufresne gives a few guidelines:

“The legislation says approximate a standard plate as best as you can. There are no specific requirements for size, shape. It just needs to be legible from 60 feet away like a real plate. The hope is that one would use common sense.”

– RMV spokeswoman Ann Dufresne in an e-mail to Peter DeMarco of the Boston Globe

A temporary license plate must be placed in the same spot an official license plate would be located. Meaning the plates should be secured in the center of the rear or front bumper. Keep in mind when a home made license plate is placed on a rear bumper it must be illuminated. Placing temporary plates else, such as in the rear view window, will not legally replace a missing plate and the driver may be ticketed.

Creating a temporary license plate and placing it in the proper location is not enough to avoid a ticket. If you are pulled over with temporary plates you must also keep proof of the license plate application that verifies your plates are in the process of being made and on their way. If you have a question of whether or not a temporary plate will allow you to legally drive the streets, consult your local Registry of Motor Vehicles.

Should Massachusetts Have a Ban on Text Message Driving?

In a recent article in the Boston Globe, writer Derrick Z. Jackson addresses the ongoing movement toward banning text messaging while driving. Nineteen states have already set implemented bans on texting while driving and the national government has also made moves toward nationalizing the movement. President Obama called distracted driving a “deadly epidemic” and a “menace to society.” The President has already banned text-message driving for federal employees.

It doesn’t stop with the President, Transportation Secretary Ray LaHood says “I’m on a rampage about this, and I’m not going to let up.’’ Even the CTIA, the wireless industry lobbying group, officially supports bans on text messaging while driving. The lobbying group has also adopted a “neutral” stance on bans of all hands/hands-free communication.

The vice president for research at the National Safety Council, John Ulczycki, released a statement to New York Times regarding the matter.

“2009 will go down as the year that we got national consensus on the dangers of texting. Hopefully, 2010 will be the year we get the same level of attention, if not consensus, on the dangers of conversation.’’

A Virginia Tech study showed that texting increases the risk of an accident 23 times and any use of a cell phone quadruples your risk. Even though studies show the facts, legislation has still not been passed to ban or limit the use of cell phones on the road. A city wide ban has been implemented in Boston on text-message driving but drivers all over the state continue to face injury and death due to distracted driving.

Jackson from the Globe believes “Baddour and Wagner,” Massachusetts House and Senate Chairmen, “need to stop negotiating over outdated nuance when we are talking about the hi-tech equivalent of driving drunk.”

Attorney General Pushes for Change in Auto Insurance Market

The State Attorney General’s office released a report this last December contending the deregulated auto insurance market has not decreases rates for consumers. Prior to deregulation Massachusetts insurance rates were set by state regulators and based on driving records and location the car is registered. Because of this there was little variation in quotes from one company to the next. Prior to deregulation insurance carriers were also required to write a policy for just about any driver which, no pun intended, drove many insurance carriers away from offering coverage in Massachusetts.

The new managed market allows insurance carriers to set their own rates, include more factors in the rating process, and reject more applicants. This means younger drivers, senior citizens, and those who do not own a home may will most likely have more expensive policies than a middle aged homeowner with an identical driving record. The managed market has brought a many insurance carriers to offer coverage in Massachusetts and create more competition.

Attorney General Martha Coakley expressed she was concerned drivers are not getting the best rates and protection. Coakley has proposed multiple improvements to the current system including the creation of a website for side-by-side comparisons of quotes for all carriers.

Frank Mancini, president of the Massachusetts Association of Insurance Agents disagrees with Coakley. Mancini stated:

The jury’s still out. Rates are probably going to go up because the business is cyclical, and that would have happened under the system we had.

– “AG Urges Changes in Auto Insurance” from The Boston Globe

Although Manchini agrees that the insurance division’s website has been less than efficient, he noted many drivers who receive lower rates utilized an insurance agent. Using an agent who writes insurance for more than one carrier is the best way to go about comparing auto insurance premiums. Someone who writes for more than one carrier will know the varying discounts each carrier offers and compare identical coverages for you. A great resource for this type of agent can be found through MassDrive.

The only way to truly make deregulation work for you is comparing quotes from different insurance carriers. Utilize the resources available and save yourself some stress, time and money.

Ready for a Quote?
Get A Quote