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Massachusetts Drivers Facing Confusion with Auto Insurance Changes

In Massachusetts, drivers have gotten along for the past 30 years with a system in which the insurance commissioner sets the premium rates that every driver pays, and no one pays more than anyone else. This system didn’t help auto insurance companies any, who usually battle each other for business in a managed-competition insurance system. All of the 50 states, except Massachusetts, have this type of system in place and it allows drivers to go from company to company, saving money on their auto insurance by comparing rates and coverage options.

However, Massachusetts has recently adopted this new change to their auto insurance, offering consumers a chance for the first time ever to choose their own auto insurance company and a rate that works for them. The only way that drivers in this state could get cheaper insurance in the past was to file an appeal with the insurance commissioner, or to take their accident case to court and fight the charges and the increase in rates. Beyond that, they were limited to paying whatever the commissioner deemed appropriate. Under this new managed competition system, the state is considering eliminating the appeals process for auto insurance rate increases and surcharges, which has saved drivers over $8 million in past years.

For most drivers, purchasing their own auto insurance and shopping around is the only way they know to acquire auto insurance. To them, Massachusetts’ old laws may seem a bit odd. However, for Massachusetts drivers, this new system can be very confusing, because they’ve never dealt with it before. The new system, and the loss of the appeals process, are causing insurance companies to jump into action, offering programs that include accident forgiveness, no-drop policies (meaning you can’t be dropped from a company after an accident), and other incentives for consumers to choose their company over another.

Massachusetts drivers have never had to make these decisions before, so they are likely very confused about what to do with their auto insurance. The state has created plenty of resources for people who need assistance with the new insurance system, so that drivers can get the right auto insurance policy for their needs, and also maximize their savings without the need of the appeals board or court proceedings. In time, this will all be old hat to drivers, but for now, it is a new challenge that drivers will have to adjust to and learn how to handle without the state holding their hand.