Wednesday, 21 November 2007
Massachusetts Allows Private Insurers To Set Auto Insurance Rates
Massachusetts is ready to start their new auto insurance system in hopes of bringing more big name auto insurance companies into the state, and driving rates down. In the first step, private insurance companies will be allowed to set their own rates for any policy with a renewal date past April 1, 2008. The state has been setting auto insurance prices since 1977.
As result, insurance companies will reduce rates by 10 percent or more, affecting 1.2 million Massachusetts’ drivers, reported the Newburyport News.
Insurance companies will also offer additional rate reductions for good driving behavior and good grades for students. The best drivers will receive the highest savings. Residents can also save more by driving less than 10,000 miles a year and using public transportation.
Another key part of the system will cap rate increases. Rates for drivers with unfavorable driving records won’t go up any more than 10 percent.
But the insurance industry is going to have to make sure consumers are prepared for the system overhaul.
“This is going to be a learning process for everyone,” said Don Beaulieu from Beaulieu Insurance. He pointed out that the industry will have to do their part in explaining the new system’s processes.
“The insurance companies are going to have to lay out a plan to make their businesses look more competitive,” added Beaulieu.
So far, state officials think the new auto insurance system will be a success.
“I’m seeing it not only in the rates but in the flurry of activity to provide additional [auto insurance] products. And companies are trying to make sure they try to retain customers,” said Massachusetts Insurance Commissioner Nonnie Burnes.
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