massachusetts auto insurance


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.

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.

Good News! Competition is working

The new deregulated system for auto insurance in Massachusetts is showing signs of success!

The number of auto insurance carriers offering plans in Massachusetts has increase by 50% since deregulation last year. Companies that have not been in Massachusetts are coming in. They are now able to offer discounts to compete for the business of Massachusetts drivers!

The Commonwealth Automobile Reinsurers collected data and found that the number of drivers classified as a high risk is at an all time low in decades. To give you a better perspective of how much this has dropped, the percentage of high risk drivers was above 60% in 1988. It is currently at 3.5%!

It’s statistically obvious that the deregulation of the market has proven to be beneficial thus far but it has also received consumer praise. More than 71% of all drivers have voiced there support of the new system. Why wouldn’t they? Drivers are saving!

Look into your options at massdrive.com if you are not happy with your current provider. The Massachusetts auto insurance market has changed and you could be eligible to receive the benefits!

Direct writers battle it out in Massachusetts

Direct writers are preparing for a battle with each other – and agents – with Geico and Allstate setting up shop in Massachusetts. According to the Insurance Journal, it’s been a long-time coming:

“We have been looking forward to serving Massachusetts drivers for a long time,” said Steve Cunningham, regional vice president, in a statement released by Geico. “We are very happy to be here and doing business with Massachusetts residents. We think we can bring them low rates and great service.”

“People are looking for value and choice,” said George Ruebenson, President of Allstate Protection. “As a company with a solid reputation and a national presence, Allstate will provide

Indeed, the consumers of Massachusetts do want choice – that’s why MassDriver.org exists, to bring light to the options and choices that Massachusetts consumers have in their search for the best auto insurance for their needs. You can’t save if you don’t compare!

Got Geico?

MassDriver told you Geico was on its way to Massachusetts,, and now Geico’s begun selling policies in the Bay State:

GEICO started selling auto insurance to residents of the state of Massachusetts on Monday.

Employees of GEICO started giving quotes online. The company said its first customer was Beth Opishinski of Whitman, Mass.

Beth, if you’re out there, let us know how your experience went!

Allstate gets more buzz on move into Massachusetts

Allstate is heading back to Massachusetts:

The personal lines insurance company said it targeted Nov. 2 as the date in which it would offer rates to consumers, if it was successful in setting ratings with the Massachusetts Division of Insurance.

Yet another big carrier brings additional options and choice for Massachusetts Drivers! We’ll be sure to report as news develops with Allstate’s application.

On Anniversary of managed competition savings to consumers still up for debate

April 1 marks the one year anniversary of managed competition for Massachusetts auto insurance, and, as the varied stories show, whether or not the consumer is benefiting is still in question.

According to Insurance Journal: “It’s difficult to measure the exact impact of the new system so far.” 

Customers are saving money  with managed competition according to Travelers Insurance, who states that “…approximately 75 percent of Travelers of Massachusetts’ customers saw savings on their car insurance…”

The Bedford Minuteman reports: “Consumer group representatives claimed Massachusetts drivers would have saved more on auto insurance premiums under the state’s old heavily regulated system…”

New insurance rules putting agents out of work?

The Boston Globe is reporting on the frustration of agents who specialize in high-risk drivers over the new rules effective April 1 which will, they say, cost them their jobs.  The agents also fear that the new rules will leave many drivers without coverage.  Insurance Commissioner Burnes countered with graphical evidence that there was a distribution of agents across the state who are not being picked up by insurance companies.

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