Sunday, December 2, 2007

Massachusetts Auto Insurance Rates

With auto insurers soon being allowed to set their own rates in Massachusetts, it looks like it's possible that Massachusetts may lose its image of having the most expensive insurance rates for cars in the US. I always felt this was strange that the state set the prices since every other state I lived in had competition and free markets, which lowered prices.

It's my understanding that this will take effect for policy holders renewing their insurance by April 1. I've read it's estimated that rates will fall at least 7.8 percent for those policies renewing by April. So far, Liberty Mutual Insurance of Boston offered the biggest average reduction of 10.7 percent.

In addition to lowering prices, there should be more product offerings for consumers to try to persuade them to sign up for their car insurance plans. It is believed that more competitors will also come to the state lowering prices even more.
Some of the major car insurance companies like Progressive and Allstate chose not to offer insurance plans in Massachusetts since it was heavily regulated. It will be interesting to see if they choose to come to the Baystate after these changes in the law although they haven't signed up yet.

While these are the benefits, I feel I should also share the concerns of some critics. Some feel the state may actually have chosen to reduce rates of at least 10 percent in the coming year
. Others noted that the new rules allow auto insurance companies to look at more factors than just driving record such as occupation, credit scores, and income when giving auto insurance quotes.

I'll be doing a little more research on the subject so expect some more posts.

1 comment:

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Will the new rules in Massachusetts help or hurt policyholders?