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.
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.
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.