What's wrong with the auto insurance industry in Masachusetts

In 2002 Ilyse was backing out of our driveway and hit a car parked directly opposite about three feet from the curb. There was no damage to our car but the dent in the other car’s door cost $1,250 (because it was an Audi).

With that accident, Amica immediately eliminated our $500 annual safe driver discount for the next SIX YEARS! So, for a claim on which they paid out $1,250, Amica is charging us an extra $3,000.

Massachusetts is the only state that regulates insurance rates. We are paying $2,568 per year for two cars in Watertown, each of which we drive less than 7,500 miles per year. There is something wrong with this.

An article in the Boston Globe in January reported

Romney has a task force working on sweeping proposals to overhaul the auto insurance system. He wants to attract national insurers to Massachusetts by reducing state regulation and letting insurers set premiums themselves.

The article also reports that meanwhile, the insurance industry is fighting changes and claiming that their rates aren’t high enough:

During the 1990s, companies sought to increase their market share by offering discounts of as much as 20 percent, but since 1999 the size of the discounts has steadily declined, along with the number of companies offering them. Auto insurers say the drop-off reflects an inadequate rate structure and an unfriendly regulatory climate.

While group discounts continue, officials at several companies said their ability to keep offering them may be jeopardized by changes recently approved by Romney's insurance commissioner in the way high-risk drivers are apportioned among companies. Many of those changes will not take effect until next year.

Commerce, the largest auto insurer operating in the state, with 28 percent of the market, has sued Insurance Commissioner Julianne M. Bowler to block the new rules.

I’m going to shop around

Plymouth Rock Assurance Co., of Boston, offers 10 percent discounts to members of the Conservation Law Foundation and the Massachusetts Audubon Society, while Premier Insurance, of Worcester, offers a 10 percent discount to employees of Boston University.

A list of approved group discounts is at www.state.ma.us/doi. Select “consumer service” and then “auto.”

UPDATE: I called Plymouth Rock about the 10% discount. The corporate office told me I had to go through an agent. The agents they referred me to said that agents don’t offer the discount and I would need to go through the corporate office. So much for that.

UPDATE: Tried Plymoth Rock corporate again and, with some persistence, got through to someone who was able to generate a quote. $2,476 ($1,019 for the VW and $1,457 for the Toyota). This compares favorably to $2,568 ($1,012 / $1,556) for Amica. But it’s probably worth $100 to keep everything with one company since I get a “multi-line” discount on my homeowners insurance.

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