Auto insurance premium increase
MA Coalition for Affordable Auto Insurance For All
- State auto insurers to seek 3.7% rate cut
State auto insurers to seek 3.7% rate cut, Boston Globe.
- Don't Buy the Bogus Housing Argument
Worcester Business Journal has produced a nice piece of explanatory journalism that could serve as a primer on auto insurance "reform" for folks who still have not caught up with the debate.
It also answers a question that has nagged at us for a while: Proponents of so-called reform keep talking about home insurance and pointing to home insurers who are pulling out of the Cape and other coastal areas. What's that got to do with auto insurance?
"A few carriers dominate both the auto and home insurance markets here," the Business Journal reports. "The danger [or so "reform" proponents say] is that in the event of a catastrophic loss - say, a major hurricane- any company that writes home insurance would be assessed losses based on their market share. With fewer companies absorbing those losses, the results for each company could be devastating."
James A. Ermilio, senior vice president and general counsel at Commerce Group, calls that argument "irresponsible" in the article and says it's just being cited to create panic. And, it ignores two rather important facts:
As the article continues, "One is that other larger companies reinsure carriers, so in the event of a loss, they can access other sources of capital. Plus, there's no reason to believe a carrier such as State Farm would be more inclined to write a home than carriers already here. Coastal home insurance, he points out, is a major concern in every state along the East and West coasts, all of which have competitive rating and still struggle to find companies to write coastal property."
Oh, so these big outside insurance companies coming in looking for a sweetheart deal are pulling out of insuring coastal houses any way, and they don't have to insure homes in Massachusetts to get a chunk of the auto insurance market. Hm. Nice argument.
On the more relevant question of whether "reform" would make it easier or cheaper for drivers in Massachusetts to get auto insurance, Ermilio "cites a 2004 report by the Division of Insurance that compared premiums in MA with states it deemed comparable- CT, NY, CA, IL, MD and PA. Overwhelmingly, it indicates that drivers on the whole pay far less to insure cars here, and the premium differences are much less exaggerated between different groups of drivers."
And we want to change that? I don't think so.
- Auto insurance fight looms again
Auto insurance fight looms again, Worcester Business Journal.
- The Globe Gets It Right
We are inclined to reprint the entire editorial that The Boston Globe published on Monday. (Yes, we are a little behind.)
It concluded that the new auto insurance "reform" bill introduced in the House last week "is not appreciably better than an earlier, ill-conceived version from Governor Mitt Romney, who thought little of burdening urban drivers with higher rates for a chance to woo national insurance carriers to Massachusetts."
From the editorial:
"The new bill... comes down squarely in the camp of the out-of-state titans. It would phase out state-set rates over five years and open the door for companies to use factors that have little to do with driving records, such as education, occupation, and homeownership status, when determining premiums."It accurately points out that about three-fourths of the state's drivers pay about $100 more a year "so that mostly urban drivers, who live in areas with more accidents and theft, as well as young drivers, can pay about $400 less."
Compare that system to states where "premiums are driven up by the risk of getting into an accident with uninsured drivers who are priced out of the market" and the Bay State system "starts to look better."
Read the whole editorial. It's worth the few minutes it will take.
- Globe Editorial: Insure Cars Fairly
Editorial: Insure Cars Fairly, The Boston Globe
- Latest Reform Just a Handout for Out-of-State Companies
It's just no good.
The latest 'reform' proposal backed by the big insurance companies does too much bad to too many people to make up for the good driver education and anti-fraud provisions it contains.
In fact, it just strikes us as a handout to the big out-of-state insurance conglomerates who don't want to compete on the state's terms. They just want double-digit profit margins, obtainable by insuring only the best risks and rejecting anyone else. That's not auto "insurance"; that's profit "guarantee-ance."
You don't believe? Well, these big boys did the same trick in New Jersey a few years back. According to Auto Insurance Report, their profits went from $346 million in 2001, before the "reform," to $741 million in 2003. You don't double your profits by lowering your rates.
And despite their arguments about saving money for good drivers, this bill would increase rates for more than a million Bay State drivers … not because of their records, but because they are young or live in cities and are poor or middle class.
Nothing in this plan would prevent insurance companies from dumping drivers into Assigned Risk Plans, or ARPs. Don't get us started on that again.
Auto rates have declined or stayed flat in five of the last six years. Just what problem is this legislation supposed to solve, other than that corporate profitability thing?
When a multi-billion dollar insurance conglomerate with no commitment to Massachusetts tries to tell you this is good for consumers, hang onto your wallet.
- Auto Insurance "Reform" Bill Should be Shelved
Auto Insurance "Reform" Bill Should be Shelved
- Auto Insurance Debate
Auto Insurance Debate, Greater Boston, WGBH Boston.
- Readers Encourage Us
Our new TV ads (see below) inspired more readers than usual to fire off an email to us. Here is what folks had to say.
Ed writes:
Thanks for getting the site up. I have been making these same arguments to my family since I saw the proposed ballot question. Saw your ad the other night. Good job!
Thanks, Ed. Isn't it nice to be right for once during a family discussion?
Roberta Writes:
I moved here from New Jersey and I definitely know the outrageous rates in that state and I do not want it to come here. What can I do as a private citizen to stop this from happening?
"Frustrated" - apparently he did not fare as well at the dinner table as Ed - writes:
Saw your TV ad. Came to the Web site. You convinced me. NOW WHAT!? What is the next step?
Pam writes:
Thanks for your ads. I was so suspicious regarding the opposition ads. I went to their Web site and talk about vague ... however, look at who's sponsoring and you see that it's the BIG insurance companies.
I lived in New Jersey up until 1997. Assigned risk was a joke! Almost everyone was assigned risk! My insurance rates were thru the roof. I had made glass claims (windshields broken by rocks on the highway) and was in an accident that was not my fault, and you'd better believe that no one wanted to insure me!
Keep up the ads. Assigned risk is not going to help us out.
Thank you for sharing your experience, Pam. We intend to keep the ads going ... for you and all Bay State drivers.
