4/1/2008: Massachusetts Auto Insurance Reform

Starting April 1, 2008 Massachusetts is moving to a "managed competition" system. This is an attempt by the Massachusetts Division of Insurance to entice national insurance companies to do business here. Rather than the state set rate, companies will be able to charge what they want for the different risks they insure.

There has been much, and highly publicized, debate over the Massachusetts auto insurance reform decision. Lobbyists have, I'm certain, lobbied and politicians have politicized. Consumers have consumed and insurance agents have continued to insure. Meanwhile the powers that be are circling their wagons to ensure that they do not lose their precious market shares.

Over the next few months companies will file their rates with the commissioner's office. This process is about as close to a high stakes, wild west poker game that you will find in the Massachusetts private passenger auto insurance industry.

From our perspective we believe that companies are going to offer large discounts to experienced drivers that have good driving records. New drivers and drivers with bad driving records will probably not enjoy the expected premium savings that will come with a new, frenzied auto insurance marketplace.

We expect that the Massachusetts advertising industry will benefit from an auto insurance advertising boon. Don't look now but shortly we will be inundated by advertising on billboards, television, newspapers, through our banks, and via the internet. Companies will be pushing for your Massachusetts auto insurance business.

So, buckle up, put on your helmet and driving gloves and get ready to shop, shop, shop until you drop!

Luckily, we are here for you at Massquotes.com. Through local, Massachusetts Independent Agencies we will find you the best rates with the best companies. We will offer you the best and most professional service available.



What's the Deal with Massachusetts Auto Insurance?

Presently no national online direct insurance writers such as GEICO, Progressive, or Allstate write policies in Massachusetts. Why? Because the Commonwealth of Massachusetts is the only state in the nation that sets auto-insurance rates. As a result, not only are companies not writing here but there has been an exodus of Massachusetts insurance companies leaving the state. This system saves many drivers especially young, urban drivers, from paying outrageous insurance premiums.

So presently, in Massachusetts, all auto insurance rates are the same. HOWEVER, with the help of your Massachusetts Independent Insurance Agent you should be able to pick and choose coverage and deductible amounts and make sure that all applicable discounts are applied. Also, there are numerous “open group” discounts that are available through numerous Independent Insurance Agencies’ companies.

Massachusetts Auto Insurance Reform/Competitive Rating

The battle lines have been drawn.

There are different points of view regarding Mass Auto Insurance reform.

In order to analyze the situation let’s first ask: How healthy is the MA Private Passenger Auto Insurance Market? The answer: not very.

Presently only 19 companies write private passenger auto insurance in the state of Massachusetts. By contrast, in 1989 there were 61 companies. Recently Fireman’s Fund Insurance Company announced their intention to leave the Massachusetts auto insurance marketplace. This will bring the number of companies writing auto insurance in Massachusetts to 18.

On one side of the argument are some of the biggest, national insurance companies including: Liberty Mutual, MetLife, & Allmerica. These companies have formed a group called "Fairness for Good Drivers. They claim that under the current system, “Good drivers pay more for auto insurance so bad drivers can pay less.”

This argument is an oversimplification. It is not so much that good drivers are paying for bad drivers as it is older, experienced, suburban drivers are subsidizing the new, inexperienced & urban drivers.

On the other side of the debate is a group calling themselves: Massachusetts Coalition for Affordable Auto Insurance for All. This group is led by The Commerce Insurance Company which, in 2005, reported profits of nearly a quarter billion dollars. Commerce Insurance insures approximately 30% of the autos in Massachusetts. This group does not want big, national insurers entering the state. Their argument is that if competition is allowed then new drivers & urban drivers will be unfairly penalized with unregulated pricing.

The MAIA (Massachusetts Association of Independent Agents) believes that the unhealthy auto insurance system, if not addressed, could prove problematic for Independent Agencies.

Presently the state’s residual market is inequitably distributed among companies creating a two-tier agency system. The structure of the residual market (ERP agencies: exclusive representative producer agency) encourages the growth of involuntary agencies, limits the appointment of voluntary agencies and fosters manipulation of agencies between companies and other agencies.

While there are many reasons the Massachusetts marketplace is not attractive to insurers (state-set rates, take-all-comers, mandatory offer, to name a few) the structure of the residual market is cited as the most significant roadblock to market entry and the most common reason for market exit.

The MAIA believes that reform of the residual market structure would be a modest step in an effort to keep the remaining companies in the marketplace & help make the Massachusetts auto insurance market healthier encouraging companies to enter the state.

 

April 1, 2008 Massachusetts Private Passenger Auto Insurance Rate Filings

Good news is on the horizon for Massachusetts auto insurance. As of November 27, 2007 companies have announced their re-filings for April 1, 2008 rates. Companies have unveiled new discounts and coverage enhancements across the board. Companies are offering such things as: more and bigger group discounts, accident/violation forgiveness credits, excellent driver and driver plus discounts, loyalty credits, account discounts, good student discounts, electronic payment and full payment discounts, hybrid vehicle discount and advanced driver training credits. Companies are also offering coverage enhancements such as: gap coverage, pet coverage, elimination of short rate penalty, enhanced towing, enhanced rental, enhanced customized equipment, and roadside assistance.

Following is a list of Massachusetts Companies and published, proposed annual rate change beginning April 1, 2008. We caution that many MA auto insurance consumers will realize much larger rate reductions than companies’ annual rate proposals. With the assistance of a pro-active, professional Massachusetts Independent Agent you will be able to combine discounts with other lines of insurance and guarantee that you receive the lowest rate, best coverage and program available.

As a customer service, you may click on the name of each Mass. Insurance Company and see their specific Discounts & Additional Coverage offered:

AMICA (-7.9%), ARBELLA (-7.7%), COMMERCE (-8.1%), ELECTRIC (-9.0%), ENCOMPASS (-4.5%), FARM FAMILY (-8.2%), FIREMAN'S FUND (-2.5%), HANOVER (-8.1%), LIBERTY MUTUAL (-8.1%), METROPOLITAN (-6%), NATIONAL GRANGE (-7.6%), NORFOLK & DEDHAM (-8.5%), ONE BEACON (-7.2%), PLYMOUTH ROCK (-7.3%), PRAETORIAN (-2.5%), PREMIER/TRAVELERS (-6.3%), QUINCY MUTUAL (-10%), SAFETY (-6.3%), STATE FARM (-1.6%), USAA (-15.5%)

Massachusetts Insurance Company Discounts/coverage affected & Additional Coverage/Discounts available 4/1/2008:

 

AMICA: Multi-Car 10% (1,2,4,5,7,8,9) Public Transit 10% (4,7) Anti-Theft 5—35% (9) Class 15 25% (final premium) Annual Mileage 5—10% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Loyalty Credit 3—7% (1-9,12) New Business 3% (ins. 3 years w. prior insurer) (1-9, 12) Multi-Line Credit up to 10% (1,2,4,5,6,7,8,9) Good Student 10% (1,2,4,5,7,8,9) Years Driving .95—1.04 (1,2,4,5,6,7,8,9) Foreign License 1.10 (1,2,4,5,6,7,8,9) Eliminate Short-Rate Penalty Enhanced Towing Enhanced Rental Vehicle Replacement Cost free within 180 days of purchase Free Lock Replacement when keys are stolen Loan/Lease Gap Coverage +7% (7,9) Higher surcharges—4 points or higher ARBELLA: Multi-Car 5% (1,2,4,5,7 8,9) Public Transit 10% (4,7) Anti-Theft 5-35% (9) Class 15 25% (final premium) Annual Mileage 5-10% (1-8, 12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Advanced Driver Training 5% (1,2,4,5,7) Policy Scoring—Safest Driver, Good, Careful, Standard, Special Chip Key added to Anti-Theft Years Licensed Factor 1.00-1.10 (1,2,4,7) Loyalty Credit 2% (final premium) Account Credit 5% (final premium) Multi-Vehicle Policy 2% (1,2,4,5,7,8,9) Customer Care Package Endorsement: Enhanced Towing and Rental; New Vehicle Replacement Cost; Replacement Cost—Mechanical Parts; Trip Interruption Coverage COMMERCE: Multi-Car 5% (1,2,4,5,7,8,9) Public Transit 10% (4,7) Anti-Theft 5-36% (9) Class 15 25% (final premium) Annual Mileage 5-10% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Account 5% (1-12) Loyalty 2-4% (1-12) Years Licensed Deviation varies Group Marketing AAA 4% (1-12) Employees of School Districts 4% (1-12) ELECTRIC: Multi-Car 5-25% (1,2,4,5,7,8,9) Public Transit 10% (4,7) Anti-Theft 5-35% (9) Class 15 25% Annual Mileage 2-15% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Years Licensed varies (all parts) Group Marketing up to 15% (total premium) Category Factor 3 sets of base rates 1=.94, 2=.98, 3=1.00 Payroll Deduction Deviation 4% (total premium) Multi–Policy 5% (all parts) Back to the top ENCOMPASS: Multi-Car 5% (1,2,4,5,7,8,9) Public Transit 10% (4,7) Anti-Theft 5-35% (9) Class 15 25% (final premium) Annual Mileage 5-10% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Good Payer Discount 5% (1,2,4,5,6,7,8) Future Effective Date 5% (1,2,4,5,6,7,8) New Car Discount 1-5% (7,8,9) Accident/Violation Forgiveness +14% (1,2,4,7) Auto Loan/Lease Deficiency +7% (7,8,9) Replacement Value Coverage +20% (7,8,9) Tier Rating—Ultra-Preferred, Preferred & Standard Parts 1&5 .72,.93,1.00 Parts 4&6 .77,.95,1.00 Parts 7&8 .77,.95,.98 FARM FAMILY: Multi-Car 5% (1,2,4,5,7,8,9) Public Transit 10% (4,7) Anti-Theft 5-35% (9) Class 15 25% (final premium) Annual Mileage 5-10% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Years Licensed Deviation 5-10% Excellent Driver 10% (1,2,4,7) Excellent Driver Plus 20% (1,2,4,7) Farm Family does not write motorcycles FIREMAN’S FUND: Multi-Car 5% (1,2,4,5,7,8,9) Public Transit 10% (4,7) Anti-Theft 5-35% (9) Class 15 25% (final premium) Annual Mileage 5-10% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Back to the top HANOVER: Multi-Car avg. 18% (Based on Factor) Public Transit 25% (4,7) Anti-Theft 5-36% (9) Class 15 25% (final premium) Annual Mileage 10-17% (1-8,12) Passive Restraint 25% (2,3,6,12) Advanced Driver Training 10% (1,2,4,5,7) Account avg. 19% (Based on Core Factor) Drive Smart + 5% (1-9) Accident Forgiveness Ultimate Towing & Labor Ultimate Rental Reimbursement Drive Smart Plus + 10% (1-9) All Drive Smart Features New Car Replacement Protection Deductible Dividends Enhanced Customized Equipment $15-$500 (for $1001-$99000 coverage) Auto Loan/Lease Gap Coverage Household Structure Factor Experience Period reduced 6—3 years LIBERTY MUTUAL: Multi-Car 5-10% (1,2,4,5,7,8,9) Public Transit 15% (4,7) Anti-Theft 5-36% (9) Class 15 25% (final premium) Annual Mileage 5-13% (1-8, 2) Passive Restraint 25% (2,3,6,12) Driver Training 5% (1,2,4,5,7) Years Driving Deviation 0-20% (1,2,4,5,7,8,9) Liberty Preferred 0-16% (1-12) Enrollment Credit 0-5.5% (1-12) Good Student 10% (1,2,4,5,7,8) METROPOLITAN: Multi-Car 15% - Code 99, 10% - Code 98, 5% All Others (1,2,4,5,7,8,9) Public Transit 10% (4,7) Anti-Theft 5-35% (9) Class 15 25% (final premium) Annual Mileage 5-10% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Years Licensed Deviation -2%-+2% (1,2,4,5,7,8) Increased Excellent Driver Plus Discount 24% (1,2,4,7) Good Student 10% (1,2,4,5,7,8) Electronic Payment 5% (1-9 & 12) Back to the top NATIONAL GRANGE MUTUAL: Multi-Car 5-10% (1,2,4,5,7,8,9) Public Transit 10% (4,7) Anti-Theft 5-35% (9) Class 15 25% (final premium) Annual Mileage 5-10% 1-8, 12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Book Transfer 5%-1st year; 2.5%-2nd year; 0%-third and subsequent years (1-9,12) Category Rating varies by coverage and operators. New Endorsements Transportation Expense Trip Interruption Disappearing Deductible Personal Clothing Roadside Assistance 1st Accident Forgiveness New Auto Loan/Lease Student Away at School varies Good Student varies NORFOLK & DEDHAM: Multi-Car 7.5% (1.2.4.5.7,8,9) Public Transit 10% (4,7) Anti-Theft 5-35% (9) Class 15 25% (final premium) Annual Mileage 5-10% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Years Licensed Deviation varies Companion Policy 5% (1,2,4,5,7,9) Good Student 5% (1,2,4,5,7,9) Advanced Driver Training 5% (1,2,4,5,7,9) Auto Pak: Accidental Airbag Deployment Coverage; New Car Protection ,<12 mos. <15,000 miles; Pet Injury up to $500; Auto Loan Lease; Excellent Driver Reward $250 deductible credit for 99,98,00 Hybrid Vehicle 5% (1,2,4,5,7,9) Motor Club Member Discount 4% (class 10,15,30; 99,98,00; eligible for companion policy discount) ONE BEACON: Multi-Car 5% (1,2,4,5,7 8,9) Public Transit 10% (4,7) Anti-theft 5-35% (9) Class 15 25% (final premium) Annual Mileage 5-10% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Category Rating -20% - +10% Loan/Lease Gap Coverage Companion Property 10% (1-10,12) OEM until 3 model years old Bail Bonds up to $500 for accidents w. BI or PD and traffic violations Additional Travel Expense up to $500 $2000 auto theft reward Emergency Roadside Assistance Accidental Airbag Deployment Back to the top PLYMOUTH ROCK: Multi-Car 5% (1,2,4,5,7,8,9) Public Transit 10% (4,7) Anti-Theft 5-35% (9) Class 15 25% (final premium) Annual Mileage 5-10% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Good Student 10-15% (1,2,4,5,7) Advanced Driver Training 10% (1,2,4,5,7) Student Away @ School 5-15% (1,2,4,5,7) Replacement Cost w. criteria Optional Replacement Cost Endorsement Disappearing Deductible up to $500 Accident Forgiveness +1.5% (1-9) Enhanced OEM Coverage <20,000 miles Exposure Based Rate Adjustment varies Approved Motor Club -5% (1-9,12) PRAETORIAN: Multi-Car 5% (1,2,4,5,7,8,9) Public Transit 10% (4,7) Anti-Theft 5-35% (9) Class 15 25% (final premium) Annual Mileage 5-10% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) PREMIER/ TRAVELERS: Multi-Car 5% (1,2,4,5,7,8,9) Public Transit 10% (4,7) Anti-Theft 5-35 (9) Class 15 25% (final premium) Annual Mileage 5-10% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Account Credit 5% (1,2,4,5,6,7,8,9) Good Student Deviation 5% (1,2,4,5,7,8,9) Hybrid Deviation 10% (1,2,4,5,7,8,9) Approved Auto Club 4% (1-6,10-12) Pay in Full 2% (1,2,4,5,7,8,9) Experience Factor varies Back to the top QUINCY MUTUAL: Multi-Car 10% (1,2,4,5,7,8,9) Public Transit 10% (4,7) Anti-Theft 5-35% (9) Class 15* 25% (final premium) Annual Mileage 5-10% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Advanced Driver Training 5% (1-12) *Redefined Class 10 Excellent Driver 10% (1,2,4,7) Excellent Driver Plus Discount 20% (1,2,4,7) Customer Loyalty Credit 4% (1-12) New Business Credit 4% (1-12) Replacement Cost <12mos & <15,000 mi. SAFETY INSURANCE: Multi-Car 10% (1,2,4,5,7,8,9) Public Transit 10% (4,7) Anti-Theft 5-35 (9) Class 15 25% (final premium) Annual Mileage 5-10% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Good Student 10% (1-12) Student Away @ School 10% (1-12) Hybrid 10% (1-12) Renewal Credit 2-8% (1-12) Account Credit 10% (1,2,4,5,6,7,8,10,12) Excellent Driver 15% (1,2,4,7) Excellent Driver Plus 25% (1,2,4,7) Points 1-3 @ 10% each; 4 points is 60%; each additional point @ 15% Loan/Lease Gap $25 per vehicle Safety Shield $25 per policy — includes Disappearing Deductible, Rental Loss of Income, Guaranteed Replacement Cost, Personal Effects, Extended Substitute Transportation, Emergency Road Travel Expenses, Supplemental Towing and Labor, Air Bag Coverage STATE FARM: Multi-Car 5% (1,2,4,5,7,8,9) Public Transit 10% (4,7) Anti-Theft 5-35% (9) Class 15 25% (final premium) Annual Mileage 5-10% (1-8,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) USAA: Multi-Car 5% (1,2,4,5,7 8 9) Public Transit 10% (4,7) Anti-Theft 5-35 (9) Class 15 25% (final premium) Annual Mileage 5-15% (1-9,12) Passive Restraint 25% (2,3,6,12) Driver Training 10% (1,2,4,5,7) Good Student 10% (1,2,4,5,6,7,9) Student Away 10% (1,2,4,5,6,7,9) USAA Legacy Deviation 10% (1-12) New Vehicle Deviation 4-12% (1,2,4,5,6,7.9) Online Driver $15 (1,4)