BOSTON—Consumer advocates urged the Joint Committee on Financial Services to support An Act to Reduce Auto Insurance Costs and Premiums in the Commonwealth SB 646, filed by Senator Tucker (Andover), which would lower auto insurance premiums for all drivers.
While
insurers and many elected officials are debating the merits of
deregulating our auto insurance rate setting process, two consumer
groups, MASSPIRG and the Center for Insurance Research are urging
lawmakers to focus first on consumers’ number one complaint – high
rates.
“The
blame for our high rates belongs to Massachusetts’s ultra-high accident
rate. Massachusetts has the dubious distinction of having the highest
accident rate in the country by far – an astounding 40% higher than the
state with the second-highest rate, Rhode Island,” testified Deirdre
Cummings, MASSPIRG’s Legislative Director. “Even improving our
worst-in-the-nation accident rate to second worst could drop our
premiums by nearly 20%, or about $200 on average per car per year,
producing over $800 million in statewide savings each year.”
“The main factor driving our insurance premiums is our accident rate,”
added Steve D’Amato, Executive Director of the Center for Insurance
Research. “Premiums correlate directly to the accident rate. Therefore
the most effective way to reduce Massachusetts automobile insurance
premiums is to focus on reducing the state's alarmingly high rate of
accidents, which is the primary cost driver of our system."
“High
rates of auto insurance claims means high auto insurance bills for
everyone so our number one priority needs to be to address our
excessive claim rate,” Senator Sue Tucker said, author of the bill.
“Lower claims rates means real savings. Lawrence drivers are receiving
a 30% reduction in their 2007 auto insurance bills as a direct result
of the city’s efforts to dramatically reduce its rate of claims.”
An Act to Reduce Auto Insurance Costs and Premiums in the CommonwealthSB 646,
filed by Senator Susan Tucker (Andover) and cosponsored by a
bi-partisan group of lawmakers, establishes a special commission to
investigate and study the impact and effects of automobile accidents in
Massachusetts on automobile insurance premiums. In addition, the act
requires the commission to develop a comprehensive plan to lower the
state's accident rate within 180 days of passage. The commission’s
investigation, study and report shall include, but shall not be limited
to, a review of the following potential reforms:
● Identifying and redesigning the most dangerous intersections in the state;
●
Informing drivers clearly and regularly about the full cost of at-fault
accidents, speeding tickets, and other traffic violations on individual
automobile insurance rates;
●
Improving enforcement of traffic violations in conjunction with a
review of existing traffic restrictions to ensure that they are
appropriate, reasonable, and not unnecessarily restrictive such that
they dilute the weight of their public safety purpose;
● Discounts for safer vehicles;
● Discounts for individuals who participate in driver education programs;
● Initiatives to combat drunk driving;
● Discounts for consumers who agree to use their own health insurance in case of >accident-related injuries;
● Improving traffic lane markings, traffic lights and signals, and road/street signs;
● Prohibiting the use of cell phones while driving;
● Making it easier for consumers to switch auto insurers;
● Disclosing and making accessible better and more information about discounts that companies are offering; and
●
Eliminating incentives to engage in fraudulent activities, revising
existing penalties for committing fraud, and increasing enforcement
aimed at eliminating fraud;
“There
is much debate today on plans to reorganize and deregulate our auto
insurance system. None of the plans being debated, however, would have
such a significant effect on lowering premiums as the adoption of a
plan to drop our accident rate to just second worst in the nation,”
concluded Cummings.
