Martha Coakley, the Massachusetts Attorney General, has proposed new regulations that she believes will take force in sales and underwriting practices for auto insurers and agents across Massachusetts. The newly proposed regulations have been formed in response to a report published by Coakley’s office last year regarding the deregulated Massachusetts auto insurance market.
Coakley said in a statement, “We have seen some positive changes since the auto insurance marketplace was deregulated two years ago. However, there are still many improvements that should be made within the system to better protect consumers.” She believes the new proposals will increase the transparency of auto insurance to help consumers shop for better policies.
Two public hearings will be held this June on the proposed auto insurance regulations. These regulations include banning of the use of credit score to determine premiums and create rules for what statements auto insurance carriers can make while advertising prices.
Coakley’s proposal has been seen in a less than favorable light by some from the industry. Of those skeptical of the proposed regulations is Paul Tetraul, Northeast state affairs manager for the National Association of Mutual Insurance companies. Tetraul called the regulations unnecessary and ill-advised. He continued to explain:
“The underlying premises of the regulations, and the report issued by Attorney General Coakley’s office, are that consumers are not faring well under managed competition and that consumers are not protected adequately under existing regulations. Nothing could be further from the truth: the increased competition has resulted in most consumers saving money and having meaningful choices in the marketplace for the first time in decades.”
Martha Coakley, Massachusetts Attorney General, has announced approximately three million dollars has already or will be returned to Massachusetts motorcyclists who were overcharged by Liberty Mutual. The insurance company is required by terms of a settlement reached in December to complete the process of issuing the refunds by May 1. Refunds range from amounts of $250 to $9,200 with an average refund of $334.
According to an article published in Legal Newsline, refunds of less than $250 will be distributed to 5,851 Massachusetts residents and 1,560 residents will receive refunds of between $250 and $499. Refunds of between $500-$999 will be sent to 1,136 residents while 740 will receive refunds of between $1,000-$9,200.
Liberty Mutual Customers who are eligible for a premium refund must have purchased insurance with either comprehensive or collission coverage for a motorcycle between January 1, 2009 and March 30, 2009. The Attorney General stated that Liberty Mutual has overcharged motorcycles during this time period.
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.
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.
Why will Progressive be paying Massachusetts $120,000?
If you haven’t heard, Progressive was investigated for its business practices after entering the Massachusetts insurance market in May of 2008. Attorney General Martha Coakley was the first to draw attention to the problem. From the start of their operations until late last year Progressive was comparing their 6 month premium prices with other companies 12 month premium. After Progressive realized they had made a huge mistake they did try to fix their mistakes but it did not help them when the charges were finally settled on May 26, 2009.
Is there any way you can protect yourself from this problem? MassDrive.com makes this easy by finding affordable Massachusetts auto insurance options and comparing them for you! It is crucial that you can get accurate quotes from multiple insurance providers to help you make the best decision. The best deal is only visible when you consider all of your options before making a decision.
This is a worthwhile article from the Providence Journal published in 2007 that goes through some of the common objections to the deregulation of Massachusetts Auto Insurance. For some politicians like Joan Menard, D-Somerset, the primary issue that caused most concern is how competing auto insurance companies in Massachusetts would set rates and what data is at their disposal in making those rates. This particularly articles gives a good early-stage view at how prevailing opinion has developed over time within Massachusetts car insurance circles.
‘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.