New Bill Benefits Insurers At The Expense of Consumers
BOSTON—Chairman
Mariano's auto insurance bill, released today from a legislative
committee and is essentially the same proposal filed by the Governor is
a giveaway to the auto insurance industry at the expense of
Massachusetts drivers," said Deirdre Cummings, MASSPIRG's consumer
program director.
"At
a time when drivers are paying higher gas prices at the pump, Chairman
Mariano's bill will allow insurers to charge drivers more for auto
insurance as well," continued Cummings.
"This
bill is terrible for consumers," added Steve D'Amato from the Center
for Insurance Research, "Even drivers with perfect driving records
could see dramatic increases in their auto insurance rates."
The
bill, released at a press conference with out full committee
deliberations, or a scheduled hearing, will lead to higher not lower
rates, lead to discriminatory underwriting and pricing practices and
does little to address to root cause of our high premiums.
Specifically, HB 5021 would:
o
Allows insurers to give much less weight to driving record than
currently required and to use discriminatory rating factors such as
occupation, education, credit scores, home ownership, etc.
o Contains a sham provision providing no real limitation on the use of credit scores.
o Provides no rate protections for drivers that insurers want to avoid
based on these discriminatory rating factors, and requires that
rejected drivers be placed in an assigned risk plan where they will
receive huge rate increases with no rate caps.
o Allows drivers with perfect driving records to be placed in the
assigned risk plan in 2008 and beyond, subjecting them to huge rate
increases with no rate caps.
o Undoes most of the subsidies for the drivers in the urban areas that
already pay the highest rates, which will cause them to receive huge
double digit rate increases starting next year.
o Freezes the bodily injury benchmark rates set by the Commissioner at
levels above where they would have been set under the current system,
resulting in a windfall for insurers.
o Doesn't cap individual increases for collision and comprehensive coverages, which are purchased by most consumers.
o Allows insurers to increase rates several times during one year, starting in 2009.
