Auto insurance rates cut again

Wednesday, November 28, 2007
By DAN RING dring@repub.com (The Republican)

BOSTON - Auto insurers yesterday filed a second round of rates that could mean substantial savings for good drivers in Western Massachusetts.

Insurance Commissioner Nonnie S. Burnes said seven insurers offered significant rate cuts from last week's first round of filings. Ten companies made no changes to average rate reductions, while two offered insignificant cuts.

"This is another chapter ... in the story of an improving auto insurance market that will really deliver benefits to consumers," Burnes said last night in a conference call with reporters. "We are seeing substantial reductions for good drivers."

Insurers filed an initial round of rates on Nov. 19 under the state's new competitive system for auto coverage.

Insurers looked at the rates filed by competitors last week and were given until yesterday to respond with new rates.

"What is important in these filings is to see the movement of seven companies to try to be competitive for customers in a new market," Burnes said.

Eighteen of the state's 19 auto insurers yesterday filed amended packages for rates that take effect on April 1.

The average statewide rate reduction is 7.8 percent, a tiny change from last week, Burnes said. That would mean a reduction of about $90.50 for a good driver from Springfield who drives a 2003 Toyota Camry with a $500 deductible on collision coverage.

This year, under the old regulated system, rates fell by an average 11. 7 percent.
Critics are concerned that elderly, teenage and urban drivers will face higher rates in the new system.

Burnes said the state's 4 million drivers must look around for the best rates. She said motorists also need to need to consider discounts and policy enhancements that could further cut premiums. Some companies are offering discounts for customers who have both auto and home insurance policies with them, for example.

Burnes said the Division of Insurance will soon update its Web site with sample policies and tips for consumers.

In yesterday's filings, rates were further dropped by some key companies that write auto insurance in Western Massachusetts. Arbella Mutual Insurance of Quincy, for example, yesterday said the average rate would drop by 7.7 percent, down from last week's 6.2 percent reduction.

Arbella's filing also showed that a third of its customers could see rate cuts of 20 percent or more, and more than half could see a decrease greater than 10 percent.
Safety Insurance in Boston filed an average rate reduction yesterday of 6.3 percent, down from a 6.1 percent decrease filed last week.

Plymouth Rock Assurance Corp. of Boston yesterday filed an average rate cut of 7.3 percent, down from 3.8 percent last week.

OneBeacon Auto Insurance in Canton filed a 7.2 percent average rate cut yesterday, down from just a 2.1 percent decrease last week.

Commerce Insurance of Webster, the state's largest auto insurer, was among those companies that didn't change their average rate reductions from last week. Commerce is offering an average rate reduction of 8.1 percent.

Hanover Insurance of Worcester, which has about 20,000 policyholders in Franklin, Hampden, Hampshire counties, filed an average rate cut of 8.1 percent, down from 8 percent last week.
Burnes is overhauling the way auto insurance rates are set in Massachusetts. Insurers are now setting their own rates, subject to review by the state. Previously, the state established one set of rates that each company charged.

Burnes yesterday declined to respond in detail to criticism by the state's attorney general.
In a bulletin sent to insurance companies, Attorney General Martha M. Coakley urged companies to file lower rates. Coakley said the preliminary filings last week included more than $200 million in extra profits and payments to agents that wouldn't have been permitted when the state set rates.

Coakley said the average statewide cut in premiums was 6 percent for next year, not the 7.7 percent estimated by Burnes last week.

"We've looked at that," the insurance commissioner said yesterday. "We haven't been able to discern why she is saying that."

The 7.7 percent cut included discounts, resulting in a faulty comparison to this year's rates, Coakley said. Discounts were considered additions in the old system and weren't used in calculating statewide average cuts, she said.

According to Amie M. Breton, a spokeswoman for Coakley, the attorney general has until Dec. 9 to complete a review of the filings of auto insurers. Coakley must decide whether to challenge any of the insurers' rates in a trial-like proceeding before Burnes.