Insurance News

Massachusetts: Not your grandfather's auto insurance market

The Metro Daily News captured a great quote from Frank Mancini, president and CEO of the Massachusetts Association of Insurance Agents, regarding the introduction of competition to the Massachusetts auto insurance market:

“It’s a big change for everyone.  We’ve had the same insurance system since the 1920s.”

An important point to remember; indeed, Massachusetts has embarked on an extremely large change and as a result, time will be needed to perfect the new system.

Newcomers versus legacy carriers in Massachusetts auto insurance marketplace

Competition has certainly changed the playing field in the world of Massachusetts Auto Insurance.  Although insurance agents continue to provide value to consumers, the increased competition is not desirable for Massachusetts insurance agents because it will change the playing field dramatically for Massachusetts Auto Insurance.  One situation with a group of Massachusetts Auto Insurance agents and Massachusetts Insurance Commissioner Nonnie S. Burnes, alleges preferential treatment for newcomers to the Massachusetts Auto Insurance marketplace.

Coakley alleges unfair rate increases for Massachusetts auto insurance customers

At the end of 2008, Massachusetts Attorney General Martha Coakley asked the Massachusetts state Division of Insurance to look at one insurance company, Premier (a subsidiary of Traveler’s Insurance), for alleged discrimination related to home ownsership.  Coakley’s office alleges that Premier’s new rating system unfairly increases rates for Massachusetts Auto Insurance consumers who do not own homes. As readers of this blog already know, Massachusetts insurance regulations prevent auto insurance companies from basing rates on income, homeownership, among other factors that could be construed as indicators for income.

Coakley critical of Mass DOI insurance rate comparison site

Massachusetts Attorney General Martha Coakley goes public with criticism of the Massachusetts Department of Insurance’s rate comparison site.  According to Coakley, the site provides Massachusetts Auto Insurance consumers with inaccurate rates.  It’s very important to note, however, that Coakley is not critical of comparison sites in general, but of the rates that the DOI displays.

‘The Web site as it is currently maintained is not only not helpful, it’s misleading,’ Coakley said at a news conference on the day the state switched to a system in which auto insurers, rather than the regulators, set rates for the first time in three decades.

The site advises consumers actual quotes from insurers ‘may differ significantly’ from the samples. Coakley said those warnings don’t make up for the fact that the sample quotes frequently don’t reflect the rate an insurer would actually offer an individual.

Thankfully, there are other additional comparison sites that area available for consumers to use for Massachusetts Auto Insurance purchases.

Who says comparison shopping isn't worth it?

In this release by Electric Insurance Company, the company encourages Massachusetts Auto Insurance customers to forgo comparison websites and shop with it directly, citing the availability of inducements and discounts on its own cite.  We can’t say that we agree with Electric, though we do like their insurance products!  Comparison sites like and others give Massachusetts Insurance customers the broadest range of choice and prices for their unique needs.  Go ahead and compare – no matter what anyone tells you!

Why does it make sense for most Massacusetts auto insurance customers to compare?  A few simple reasons:

  • Insurance companies sometimes have vastly different rates that can cost or save you money
  • Depending on you and your family’s unique situation, certain insurance companies will offer benefits that will save you the most money
  • Comparison shopping will inherently give you more information about the auto insurance process in Massachusetts
  • It’s now a free market!

Another side to Massachusetts auto insurance competition

WCVB-TV in Boston does a good job of explaining some of the negative aspects of the advent of competition in the state of Massachusetts.  Indeed, some better drivers have not immediately realized the benefits of being a good driver because their rates did not drop significantly – this can be attributed to the formula with which insurance companies calculate rates.  As readers of will note, this exact topic has been central to the debate on deregulation of Massachusetts Auto Insurance since its inception.

It’s important to note that this formula is set to change in 2009, and insurance companies will have more opportunity to provide better drivers with lower auto insurance rates in Massachusetts.

'You're Entering Massachusetts,' Progressive

Progressive Auto Insurance is now available for Massachusetts Car Insurance buyers, due to the introduction of competition by the Commonwealth of Massachusetts.  According to this article in the Insurance Journal, Progressive is selling its services both directly to consumers and through agents.  According to Cathy Wilton-Bransch, a spokesperson for Progressive:

“We appreciate the work the [Massachusetts Division of Insurance] has done to create a regulatory environment that allows companies to compete for customers. We hope that come May 1, drivers will check out and see what we have to offer.”

In a related point, The Insurance Journal notes that Liberty Mutual insurance company plans to return to Massachusetts, as a result of deregulation of the insurance market in Massachusetts.

Words of wisdom from Daily Times of Woburn

The Daily Times of Woburn ran a solid piece meant to be informative to residents of Woburn, Massachusetts, acknowledging that the introduction of competition to the Massachusetts auto insurance marketing does indeed make for more complex decisions for Massachusetts consumers.  But, put simply, it’s meant to ultimately benefit consumers. From The Daily Times:

Competition is designed to encourage insurance companies to offer their lowest possible premium to each driver.

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