The Massachusetts Division of Insurance has issued an official warning to all auto dealers in the state. Salespersons are told to watch what they say and do regarding auto insurance while selling a vehicle. Joseph Murphy, the Massachusetts Commissioner of Insurance, published a letter addressed to all auto dealers and salespersons on the Consumer Affairs and Business Regulation website.
Murphy states numerous reports have been filed with the Division of Insurance that certain motor vehicle salespersons are giving recommendations about particular insurance companies and assisting customers in purchasing their auto insurance. He warns that only licensed insurance producers are given the authority to sell or attempt to sell, negotiate or solicit insurance, including motor vehicle insurance. The letter stated:
This Bulletin reminds insurance companies and those individuals involved in the sale, finance, registration or insurance of motor vehicles of the Massachusetts rules about placing insurance on motor vehicles. These rules reflect the longstanding principle that only those who have demonstrated knowledge and competence about motor vehicle insurance by obtaining an insurance license from the Division are permitted to advise consumers about the purchase of such coverage.
The posted bulletin gives these five specific examples of what an auto salesperson may not do while selling a motor vehicle:
Example 1: A motor vehicle salesperson advises a customer that he could save money by buying his motor vehicle insurance from The XYZ Insurance Company. The salesperson is improperly “soliciting” motor vehicle insurance because she is recommending or urging a person to apply for a motor vehicle insurance policy from a particular company.
Example 2: A motor vehicle salesperson assists the customer to obtain insurance online by using his office computer to search for motor vehicle insurance for the customer while the customer watches. The salesperson is violating Massachusetts insurance law because he is “negotiating” motor vehicle insurance for the customer by assisting the customer to “obtain” it.
Example 3: A motor vehicle salesperson offers her customer the use of a computer at the motor vehicle dealership so that the customer can search for motor vehicle insurance, but the computer is preset to the website of a particular insurance company. The salesperson is improperly “soliciting” motor vehicle insurance because she is asking or urging a person to apply for insurance from a particular company.
Example 4. A motor vehicle salesperson who is arranging financing for the purchase of a motor vehicle tells his customer that she must purchase insurance from a particular insurance company. The salesperson is violating Massachusetts law because he is making financing contingent on purchasing insurance from a particular insurance company. G.L. c. 175, § 193E.
Example 5: The motor vehicle dealership maintains a computer terminal linked to the internet for the use of its customers. A customer may use the terminal to search for insurance as long as the salesperson does not operate the computer, the computer is not preset to any particular insurance company’s website, and the salesperson does not recommend that the customer apply for motor vehicle insurance from a particular company. The salesperson may suggest that the customer start her search for motor vehicle insurance by visiting a site that provides general advice on the purchase of such insurance. A salesperson may always refer her customer to The Division’s website, www.mass.gov/doi for such information.
This is a firm reminder not only to auto salespersons, but consumers as well. Only a licensed agent holds the knowledge necessary for insuring you with appropriate limits. The deregulation of the auto insurance market has given consumers the option to compare quotes and find the best price, not to be bullied into signing with one insurance carrier or another. For a free quote call MassDrive where a friendly representative will compare quotes from different carriers for you!
To read Joseph Murphy’s letter regarding the involvement of motor vehicle salespeople in the solicitation, negotiation or sale of motor vehicle insurance please access the Consumer Affairs and Business Regulation website here.