Insurance News


Allstate Premiums Increase

Thousands of Allstate home insurance customers will see an average increase of 9.8% next month. Allstate’s increases will take effect December 17th when policies come up for renewal. Bill Mellander, Allstate Spokesman, stated an increase in claims costs, particularly from roofing repairs and materials, is a driving force behind the increased rates.

A great way to find discounts on homeowners insurance is through companion policies, when you purchase multiple policies from the same company. For example MassDrive offers discounts on both homeowners and auto insurance when both policies are purchased through a MassDrive agent. Contact a local MassDrive agent through our website or call: 866-963-8231 for a free quote.

Why You Need Underinsured Motorist Coverage

According to the Insurance Research Council more than 14% of U.S. drivers are uninsured. You may be wondering: So what? How does this affect me?

Your chances of being involved in an accident with an uninsured motorist is one in every seven accidents. If you’re involved in an accident where an uninsured motorist is at fault, you better hope that person has a few thousand dollars saved away – unlikely – or know that your own insurance will cover the damages.

Uninsured Motorist coverage is designed just for these situations. If you’ve opted for underinsured motorist coverage, your insurance company will foot the bill for your medical bills . Even further if you have Underinsured Motorist coverage, your own insurance company will pay for your auto repairs. Do yourself a favor and look over your current policy, ensure you have these coverages. If you don’t, it may be time to compare prices and shop around for another affordable insurance policy with these coverages.

Understanding The Basics

What is your insurance policy really telling you? Some auto insurance terms are confusing in themselves. Take a look at the basics below to gain a better understanding of your auto insurance policy:

Property Damage Liability: This coverage will pay for any damages your auto does to someone else’s property. Usually this would be damages done to another car, but this coverage will also pay for damages to other property such as fences, light poles, a house or any other types of damages that may result from an accident.

Comprehensive Coverage: This coverage protects your auto when damages occur from something other than a collision. This type of coverage covers things like if your car is stolen or maybe damaged by water, fire, or animals.

Collision Coverage: Pretty straight forward on this one. This will cover your car when it is involved in a collision with another car or object.

Bodily Injury: This coverage is key to keeping you financially sound covering injuries or death that you are responsible for. This coverage will also cover the cost of your legal defense should another driver bring a lawsuit against you.

Uninsured Motorist Bodily Injury: This coverage protects you from bodily injuries, damages, or death caused by an uninsured auto found at fault and hit and run. When the other party does not have the coverage to repair your car or pay for your medical bills from an accident, this coverage will kick in and save you from large out of pocket expenses.

A great source for insurance information, from state requirements to changes in local legislation, is the Massachusetts Department of Insurance website. For more specific information and definitions consult your insurance provider and your policy.

What Does My Auto Insurance Cover?

What will my auto insurance When applying for auto insurance it’s important to understand just what and who your coverage will cover…

Who holds the policy?

The owner of the vehicle will generally hold the insurance policy. When applying for a policy the insurance company will look mostly into the person’s record who’s purchasing the policy and the primary drivers. An insurance company will also look into the records of secondary drivers. If these secondary drivers are teens or have many citations expect your insurance rates to be a bit steeper.

Who’s Covered?

When purchasing an auto insurance policy it’s important to understand who’s covered. The policy application will ask for the names of all persons living in the house that will be operating the vehicle, how much they’re going to use it, etcetera. It’s important that you list all these drivers on the policy. If someone living in your house is involved in an accident who is not listed on the policy, your auto insurance may deny your claim.

Can another person borrow your car?

If a driver outside of your household borrows your car and is involved in an accident, your insurance should still cover the damages. Even if this person has their own car and even their own insurance. This is because insurance follows the auto and not the driver.

What’s covered and what’s not?

When purchasing an auto insurance policy, it’s important to read over the coverages you have. Getting a policy with only the state minimum coverages is risky and ill advised. Before buying it, look over the coverages and make sure they’re adequate and affordable should you be at fault in an accident.

Managed Compeition… Success.

April 1st 2008 Massachusetts let the auto insurance industry loose. Shifting from state regulated rates to a managed competition many changes were brought to the Massachusetts auto insurance industry and consumers.

A study by the Department of Insurance analyzing this change included: a preliminary survey of 1,100 consumers, a comprehensive 30-minute survey of more than 4,500 drivers and one-on-one interviews with over 50 insurance agents and executives. This study has shown the overall shift to managed competition to be a positive step for the average Massachusetts auto insurance consumer.

The study showed in the first year of managed competition….

  • Massachusetts drivers saved over $270 million in auto insurance premiums.
  • The auto insurance premium dropped by an average of 8.2 percent.
  • Nine new insurance companies entered the Massachusetts auto insurance market. These new companies entering sparked a competition among themselves, bringing lower rates and better service options to customers.
  • There was a 13% decrease in the number of uninsured cars on Mass roads.

As many consumers saved bundles on affordable auto insurance rates, only three out of four consumers were aware of the insurance market change. The government realizes the lack of knowledge consumers have concerning the new auto insurance industry and hopes to educate the public with more education and outreach.

Cancelling Your Auto Insurance

Write it on a post it note. Program it into your phone. Leave yourself a voice mail at home. What ever it takes, don’t allow your auto insurance to lapse.

Here are a few things to remember about auto insurance cancellations:

  • Driving with out insurance is illegal. Should anything happen while you’re driving, not only will the violation be added to your driving record with a citation, raising your insurance rates – if you’re at fault for an accident, all damages your insurance company would have paid will come straight out of your pocket.
  • You don’t need to wait for renewal time to cancel a policy. Shopping around to find another policy with better rates is a great idea. No need to wait until your current policy is up to start saving.
  • Never ever ignore your insurance bill. Ignoring your insurance bill may be cause for cancellation due to non-payment. When this occurs not only will future insurance companies see you as a higher risk, they may ask you to pay the full insurance amount up front.
  • Cancellation must be done in writing. When you notify your current insurance company of your cancellation allow a reasonable amount of time for cancellation. When notifying the company, be sure and include the date you would like cancellation to take place giving yourself peace of mind for when you’re old coverage is up and your new one is to begin.

Why You Need More Than the Minimums

Auto insurance is anything but optional. Not only should you want to have car insurance, the sate requires drivers to purchase it. Two important coverages, among others, Massachusetts requires drivers to have are Property Damage and Liability Coverage.

Property damage covers damages the insured has caused to someone else property. Massachusetts state minimum for property damage is $5,000. This covers everything from street lamps and stop signs to other vehicles. Maybe you didn’t realize you were speeding when an oil spot sent you spinning into that Bentley… you’re still responsible for the damages and that $5,000 of coverage isn’t gong to do much. To be safe you should consider at least $100,000 of property coverage.

A second minimum coverage set by the state is Liability coverage. This includes bodily injury and property damage to others.  Maybe the state minimum will cover one person in a minor accident. But what if it was more than a fender bender? Or maybe there were passangers in the car you collide with? When multiple people are involved, or even just one in a decent accident – the $40,000 minimum state coverage isn’t likely going to cover all of the hospital bills, operations, medications, and therapy your accident incurred.

If you choose to only insure yourself to the state minmums, remember you are responsible for all expenses past what your insurance covers. Find out more about Massachusetts state minimum insurance requirements on the Massachusetts Division of Insurance Webpage.

Keep Insurance Rates Low

Q: What’s the easiest way to keep low insurance rates?

A: With a clean drivers record.

Not only will you need to pay that speeding ticket, you’ll be paying for it the next couple years on your auto insurance. Insurance companies determine your rates in part by what kind of a driver you are. If you’re a safe driver with no citations, an insurance company sees you as a low risk to insure. If you’re a road-raging multi-major-accident driver, the insurance company may view you a little differently.

Massachusetts determines the magnitude of driving violations with surchargeable points. For example, a major accident will count more points than a 5 mile over speeding ticket. Take a look at how Massachusetts classifies your driving violations:

Surchargeable Incident Surcharge Points
Major Traffic Violation (i.e., D.U.I.)

5

Major At-Fault Accident (claim over $2,000)

4

Minor At-Fault Accident (claim over $500 to $2,000)

3

Minor Traffic Violation (i.e., speeding)

2

Each citation adds more than just a few bucks on to your insurance. Avoid these hefty points with safe driving: allow  extra traveling time, drive defensively, and buckle up. Your check book will thank you.

Department of Insurance Report

The Division of Insurance or the DOI issued an executive summary about the progress of Massachusetts change to managed competitive. Under the old system, state regulators set the insurance rates that all automobile insurance companies were allowed to charge.

The new system has generated some excitement and brought in nine additional insurance carriers to the Massachusetts market. Insurance companies can now offer competitive rates, and additional products and services. This is very beneficial to the consumer but it is also important for the consumer to do research to find the best rates.

The program has been a success overall because Massachusetts Division of insurance reported that “Massachusetts consumers saved over $270 million in insurance premiums in the first year of managed competition.” There was also a “13 percent decrease in the number of uninsured vehicles on Massachusetts roads.”

There was a lot of speculation on what the new regulations would do for insurance providers, more particularly, the agents. Fortunately for agents, “sixty-nine percent of consumers continue to purchase coverage through agents, rather than purchase directly. This number is nearly twice the national average.”

The biggest issue is that “approximately three out of four consumers indicated that they were aware of the new auto insurance system, and those who were aware were 60 percent more likely to have saved money than those who were not aware.”

It seems apparent that the system has generated positive outcomes but education and notification for residents may be an area for increased performance.

What Does Everyone Have to Say About "Managed Competition"?

For years, the state of Massachusetts controlled auto insurance carriers to produce higher revenues.  However, the system has changed directions, and state officials put a “managed competition” program into place in order to lower car insurance premiums and rates. This program has been in existence for about two years now, and has received both praise and criticism from the public.

Many advocates predict that the introduction of this new system will cause many new carriers to enter  the industry. Opponents believe that the “managed competition” system would create discrimination of select drivers.  They also believe that the cheaper premiums would effect the state insurance agents negatively by reducing their commission.  These mixed reviews have not fully happened because the  system is still quite young. 

There are currently a few companies that provide auto insurance for Massachusetts drivers, and are offering competitive and cheap premiums and rates for their consumers.  As the years go by with this new system, more opinions will form, and hopefully the auto insurance industry will be both beneficial for both consumers and state agents.

Ready for a Quote?
Get A Quote