LETTER: Industry could be winner on auto insurance

Industry could be winner on auto insurance

More on SouthCoastToday.com re: Rep. Koczera's concerns from the Legislative Director of MASSPIRG

"Rep. Koczera has good reason for concern about how the new deregulated auto insurance system will impact consumers.

While not completely final, here is what we know already:

First, average rates will be higher under the new plan vs. the current plan. Despite its flaws, our existing auto insurance system produced a 21 percent decrease in rates over the last three years and would have cut rates by at least 11 percent next year, according to both our analyses of rates over the last 10 years and the attorney general's office.

Under the new system, the average rate decrease is about 7 percent based on the insurers' estimates of the effect of their filings. Gov. Patrick's commissioner of insurance denied the attorney general access to information that could have determined whether these estimates are inflated, so even the 7 percent figure is suspect. In any case, the net result on the average premium under the new system compared to our regulated one, is an average increase in rates of at least 4 percent.

Second, while the commissioner did prohibit insurers from using unfair and socioeconomic factors like credit scores and education to set premiums, she did not prevent them from using proxies for those banned factors. And just last week the commissioner prohibited the attorney general from presenting evidence showing that certain rating factors proposed by the state's largest auto insurer were unfair to consumers.

Unfortunately, it does not come as a surprise that the real winners of the deregulated auto insurance industry are the insurers — not the consumers. When was the last time you saw an industry push for changes that would benefit the consumer over the industry? "

Deirdre Cummings
Legislative Director
MASSPIRG
Boston