The Howes Insurance Agency

MAIA Cautions Consumers About Progressive Quotes

2008-05-06T16:10:00.002-04:00

MAIA Cautions Consumers About Progressive Quotes;
Files Formal Complaint With DOI

Today, MAIA issued a press release to every daily newspaper in the state cautioning consumers about serious issues with quotes received from the Progressive Direct website. After initial reports of "dirt cheap" rates, MAIA took a long, hard look at the quotes produced by the site.

According to MAIA President and CEO Frank Mancini, "Our review of the quotes provided by Progressive reminds us of the old saying, 'it it looks too good to be true, it probably is.' Consumers should use extreme caution when requesting online quotes because a computer doesn't ask the questions a live person would ask to be sure you are adequately protected."

Since many of MAIA's issues with the website are believed to be serious violations of the managed competition regulation, MAIA has also filed a formal complaint with Commissioner Nonnie Burnes and notified Attorney General Martha Coakley and Undersecretary of the Office of Consumer Affairs & Business Regulation Daniel Crane of the violations.

The most flagrant violations include:

Progressive requires anyone requesting a quote to provide their social security number, gender, recent military service and marital status. The quote process also informs applicants that Progressive obtains credit reports and credit scoring information, which is prohibited in Massachusetts for both rating and underwriting purposes.

Progressive acknowledges that Massachusetts law requires that every insurer offer twelve-month term private passenger motor vehicle insurance policies at the consumer's option, yet there is nowhere on the Progressive site where a consumer may exercise that option. When questioned on the phone about a twelve-month policy, a Progressive representative admitted that twelve-month policies are not available.

Comparative quotes of Progressive rates with the rates of other companies writing autoinsurance in Massachusetts are inaccurate and use a policy term of six months which is notavailable from any other insurance company in Massachusetts. While other insurance company quotes include an indication of the impact of your driving record in terms of surcharges for at-fault accidents and conviction of traffic violations and credits for good driving, the Progressive quote does not appear to include merit rating information.

We have posted the complete text of the MAIA press release on our website, and you may access it by clicking here.

It is imperative that the information in this press release be seen by as many consumers as possible, and we need your help with this. If you have contacts with your local daily and weekly newspapers, please walk the press release into your contact as soon as possible. Offer to answer any questions your contact or consumer reporters have, or refer them to us if you're not comfortable in that role.

We have also posted a copy of our complaint letter to the Commissioner on massagent.com. You may access this document by clicking here.

Please feel free to contact Frank Mancini or Donna McKenna or by phone at 800.972.9312 or 508.628.5452 if you have questions or need additional information.

Auto Insurers Rip Rules on High-Risk Drivers

2008-04-17T13:53:00.002-04:00

3-year break for newcomers writing polices called unfair

By Jeffrey Krasner, Globe Staff April 17, 2008

Many of the state's auto insurers say competition rules that took effect April 1 give an unfair advantage to companies just entering the Massachusetts market.

Under the state's revamped auto insurance system, insurance companies new to Massachusetts do not have to take on its riskiest and least desirable drivers for about three years. That could give them a financial boost compared with insurers already established in Massachusetts, which will automatically be assigned high-risk drivers based on their market share.

"Those that are in the market are seeking equity and fairness and those that are just entering the market are seeking any advantage they can get," said James T. Harrington, executive director of the Massachusetts Insurance Federation, an industry group that supported the new system, called managed competition.

Progressive Corp. of Ohio, the only insurance company that so far has firm plans to enter the Massachusetts auto market, said it supports the rules exempting it from having to insure high-risk drivers.

"The plan as written is fair, equitable, and consistent with plans in other states," said Emily A. Vlasich, corporate counsel for Progressive, in written testimony to the Division of Insurance.

The Patrick administration last year undertook an ambitious overhaul of the Massachusetts auto insurance market, which was the last one in the country where rates were set by regulators.

Under the new system, companies set their own rates and have greater flexibility to introduce innovative product features and discounts for different drivers. The overhaul was also intended to address problems with how high-risk drivers were assigned to companies. Some insurers claimed their competitors were able to manipulate the old sys tem to avoid paying their fair share for undesirable drivers, who typically generate more claims, causing losses for insurers.

Since auto policies only started renewing this month, relatively few motorists have signed up for policies under the new rates, which are expected to be lower for most drivers.

At the center of the current dispute are rules enacted this year by Insurance Commissioner Nonnie S. Burnes that control the so-called residual market for bad drivers, such as those with numerous moving violations. A public comment period on the rules ends tomorrow, and they must eventually be finalized by Burnes. Under the new system, insurance companies will be assigned high-risk drivers randomly, and are expected to cover such drivers commensurate with their share of the market.

But companies just entering Massachusetts will receive an exemption for almost three years.

"This result is patently unfair to existing companies, especially when one considers how quickly a large company with significant resources can gain market share when entering a new state," wrote Paula W. Gold, vice president and chief regulatory counsel for Plymouth Rock Assurance Corp. of Boston, in testimony to the Division of Insurance. "There should be no free ride for any carrier."

John F. Kittel, executive vice president of Arbella Insurance Group, said in written testimony that with the three-year wait in place, "the rest of the market is subsidizing the new entrant."

He said insurers should be able to provide timely market share data to the state, so there's no practical reason why new entrants could not take on their share of undesirable drivers quickly.

Chubb Group of Insurance Companies, which is based in New Jersey and does not sell auto policies in Massachusetts, disagreed. Michael W. O'Malley, senior vice president of state government affairs for the company, wrote in testimony that an insurer needs to be selling for at least a year before accurate market share numbers can be compiled. He said the rules giving new entrants in Massachusetts three years without high-risk driver assignments are similar to the "tried and true" methods used in about 40 other states.

Progressive, which will begin Internet-only sales May 1, acknowledged in its testimony that it is viewed by some as getting a "free ride" under the new system. But the insurer disagreed with the characterization and said it would voluntarily write policies for high-risk drivers, and thereby avoid random assignment of such customers.

Mass Auto Insurance Has Bumpy Past

2008-03-25T08:31:00.002-04:00

Sunday, March 23, 2008

By Dan Ring

The Republican

Insurance Commissioner Nonnie S. Burnes said she picked up some important lessons from history before her bold move to start competitive car insurance for the state on April 1.

Thirty years ago, Massachusetts dropped its highly regulated form of auto insurance and introduced competition. It turned out to be a brief, failed experiment that drove up rates too high for urban motorists and left the state gun-shy for decades about making any similar changes.

Burnes, who was appointed commissioner in early 2007, said she was keenly aware of the turmoil that erupted after a sweeping law for competitive auto insurance took effect in 1977.

"That was terrible for the consumer, awful for the companies," said Burnes, a former 10-year superior court judge appointed commissioner by Gov. Deval L. Patrick.

Massachusetts has a long tumultuous history with auto insurance. The state approved the country's first compulsory car insurance and first regulated rates in 1926.

A public outcry over mandatory insurance and rising rates caused a crisis on Beacon Hill and prompted the resignation of the state's insurance commissioner in 1928.

Fifty years later, another major dispute erupted when the state made its initial attempt at competition in auto insurance.

Back then, companies were given little time to prepare. Actual rates were unavailable on Jan. 1, but policies were renewed anyway for consumers, taking away choice.

"You can imagine how consumers felt about that," Burnes said.

According to a history provided by the state Division of Insurance, rates skyrocketed in Boston and nearby urban areas.

Patrick B. Bresnahan, who started Bresnahan Insurance Agency in Holyoke in 1957, said urban youth were hit especially hard by the first effort at competition in auto insurance.

"It was chaos," Bresnahan said. "Kids were paying more for insurance than they were for their cars."

Legislators responded by passing a law to cap increases at 25 percent over 1976 levels and ordering insurers to send rebates to some auto owners.

Insurers filed lawsuits and the state's insurance commissioner abandoned the new competitive system and returned to setting rates for 1978.

In succeeding years, auto insurance companies fled the state.

Bresnahan, 73, said he watched companies desert the state during the 1980s and 1990s. "They just could not make a profit here," he said.

In 1977, there were 111 auto insurers doing business in the state. By 1990, that number dwindled to 53 and it stands at 20 today, although that number is expected to grow as other companies come back to the state.

Several insurers paid the state huge exit fees to be released early from their legal obligations. It made more financial sense to pay the fees instead of remaining in the state and continuing to lose money.

Peter T. Robertson, lawyer in Massachusetts for the Property Casualty Insurers Association of America, said insurers were discouraged by the state's method for covering high-risk drivers.

Insurers are allowed to place those drivers in a pool where their accident costs are shared by all insurers and then passed on to all drivers annually.

Burnes is gradually moving to a system of randomly assigning those drivers to an insurer. The amount of assignments to any company would hinge on a company's market share.

Under "assigned risk," insurers will be more responsible for the accident costs of its riskier drivers, giving insurers an incentive to more closely examine claims and reduce fraud.

Robertson said assigned risk is also a fairer way to allocate such drivers.

When Burnes announced her intentions to start managed competition in July of last year, she said the state should no longer be held hostage by the 1977 experience.

She used a state law to administratively phase in managed competition.

She opted to begin the new system on April 1 when 314,000 policies renew.

A total of 540,000 policies renewed on Jan. 1, but are based on last year's rates.

In order to avoid mistakes of the state's past attempt at competitive rating, Burnes capped rate increases at 10 percent for the state's worst drivers. Insurers can set their own rates but only with strict state oversight.

Burnes also retained vestiges of the old system where regulators set all auto insurance rates.

For example, she kept a system of "rating territories" that allows for suburban communities to subsidize rates of urban centers to slightly cut insurance costs in cities where accident rates are higher. Experienced drivers are also paying somewhat higher premiums to keep down the insurance costs of younger motorists.

Burnes is also continuing to ban the use of credit scores and certain socioeconomic factors in determining auto insurance rates.

"I'm going to retain a lot of control to make sure it is rolled out in a smooth way and is beneficial to the consumer," Burnes said.

Insurance costs will still hinge on a person's driving record, type of car and coverage selections.

Other aspects of the state's auto insurance system are sealed in state law and can't be changed administratively, Burnes said.

Under state law, for example, motorists must have only $2,000 in medical bills before they can sue the driver who caused the crash.

Former Gov. W. Mitt Romney sought unsuccessfully to raise that threshold to $4,000 to limit personal injury lawsuits and wring costs out of the system.

Romney also wanted to save money by limiting windshield replacements. He sought to create a $100 deductible that would have been waived for a more economical repair of a windshield. Right now, there is no deductible on windshield replacements.

Future historians may tell us the fate of those and other proposed reforms.

Goal: More Insurance Choices

2008-03-12T14:59:00.002-04:00

By Jerry Kronenberg

Wednesday, March 12, 2008

Boston Herald

Market watchers hope Massachusetts’ new “managed-competition” car-insurance system puts Nationwide on our side - along with Geico, AIG and other firms that have avoided the Bay State for virtually decades.

“If consumers get more choices, that’s a good thing,” state Insurance Commissioner Nonnie Burnes said, saying more firms might enter Massachusetts once the new system starts on April 1.

Burnes said more than 80 percent of insurers quit the Massachusetts car-insurance business during the 30 years that the state heavily regulated rates. Other underwriters never set up shop at all.

All told, only half of the nation’s 10 largest car-insurance firms currently operate here.

However, No. 3 insurer Progressive recently announced plans to begin writing policies under the new system. So has smaller underwriter Peerless, a subsidiary of Boston’s Liberty Mutual.

“The new system hasn’t even started yet and we already have two new (insurers),” Burnes said. “I don’t think that’s a bad start.”

Massachusetts had 111 insurers in place when the state began setting car-insurance rates in 1977.

But 92 have left since then, with no one coming in to replace them.

“Under the old system, it was very difficult for most companies to make money here,” said Frank O’Brien of the Property Casualty Insurers Association of America. “But assuming managed competition sticks, I think we should see more companies coming here.”

Still, Stephen D’Amato of the Center for Insurance Research said adding new insurers “is only a good thing if it produces lower, fairer rates for consumers.”

D’Amato claims the new system gives insurers too much power to base rates not just on driving records, but also on things such as homeownership - factors he said favor the rich.

“Competition can be good,” D’Amato said, “but not the way it’s being implemented.”

Plymouth Rock Billing System Changes - Letter to Agents

2008-02-11T13:42:00.000-05:00

Dear Greg:

We have recently implemented several enhancements to our direct billing system that apply to all policies, regardless of effective date.

In response to your requests, we have instituted a grace period of five calendar days from the payment due date. This grace period becomes effective today and applies to invoices only. A Notice of Intent to Cancel for Non-Payment of Premium will not be issued unless the minimum premium due is not received within the grace period. If a cancellation notice is issued, the effective date of the cancellation will not be extended by any grace period. While this will accommodate occasional delays in mailing time, we would recommend customers who make a payment on or near the actual due date use your agency web payment option to ensure their installment is credited and the policy does not fall into arrears. Next month, we will unveil the first phase of our consumer interface on PlymouthRock.com that will allow customers to access their bills and make payments online without going to the agency.

Also, the return coupon on the billing invoice now lists the payment mailing address on only one side, and has a new optical scan line to improve processing time. Our testing has shown this should reduce the amount of manual handling of payments that can delay proper posting of a payment.

We hope these new billing features will make it easier for you and your customers to do business with us. It’s one more way we can offer “More Than Just Insurance. AssuranceSM.”

Please contact your Marketing Representative with any questions. As always, we thank you for your business.

Bob Warren
Marketing Director - Massachusetts

Development, erosion keep coast at risk

2008-02-08T13:59:00.000-05:00

By Rich Fahey
Globe Correspondent / February 7, 2008

Thirty years ago today the Blizzard of '78 was ravaging the South Shore. Wind gusts of more than 100 miles per hour combined with heavy snowfall to destroy thousands of homes and boats. Before it was over, more than two dozen people would be dead statewide.

What would happen if the same storm hit the South Shore today? Would the flooding, destruction of property, and beach erosion be as severe? Or would changes in building codes and in the way we respond to storms result in less property damage and fewer lives lost?

The answer: We might be better prepared, but the damage could be just as great - or greater.
Specialists say the almost continuous beach erosion from storms in the ensuing 30 years has created a new set of problems, should a storm like the Blizzard of '78 hit the South Shore again.

"The erosion shifts from previous storms have moved the flood plain, putting more homeowners in jeopardy," said Rebecca Haney, a coastal geologist for the state Office of Coastal Zone Management. "In addition, there has been a significant amount of construction in those flood plain areas."

Many of the summer cottages that were unoccupied in coastal towns during the storm 30 years ago have been converted to year-round residences, putting more families squarely in the bull's-eye of a sequel to '78.

"Those cottages are now year-round residences, many of them still vulnerable to a storm," said state Senator Robert L. Hedlund of Weymouth, who represents many of the coastal communities that were devastated in the Blizzard of '78.

Partly offsetting that vulnerability is the fact that homes along the coast, while more exposed, are better built than they were 30 years ago.

Neil Duggan, Scituate's building commissioner for the past 14 years, saw his home - a converted cottage on Lighthouse Road - heavily damaged during the blizzard. Duggan, like others, wanted to rebuild. By 1979, revisions to the state building code required that any rebuilt home in a danger area had to be elevated on 11-foot-high pilings or columns, said Duggan. In 1982, he said, improved federal maps were developed for Scituate, requiring higher elevations in some hazard areas.

Portions of the state building code are routinely refined; the most recent change is a requirement for high-impact windows in debris-borne areas and more stringent hurricane-resistant construction requirements.

Still, erosion is eating away at the buffer between the ocean and coastal communities. Communities such as Scituate and Duxbury have been losing on average a half-foot of beach each year.

While some emphasis has been on building sea walls, the beaches and dunes - not the walls - are the first line of defense against coastal flooding. Hedlund said he was able secure federal money for beach renourishment at Nantasket Beach in Hull, but not for sea wall construction, because "the federal government considered the beach more important when it comes to flood control."
Haney, the state coastal geologist, said the Massachusetts Wetlands Protection Act and subsequent regulations designed to protect beaches and dunes have helped, but storms have still wreaked havoc with the shoreline.

Towns and cities have taken it upon themselves to prepare for the worst. In Hull, which was devastated by floods in '78, an emergency operations center was built as part of renovations to Memorial Middle School.

Acting fire chief Robert Hollingshead, who is also in charge of Hull's emergency preparedness, meets with the heads of town agencies several times a year and whenever a major storm is forecast.

Hollingshead, who joined the Fire Department just after the 1978 storm, said that advancements in technology have improved communication with the public in emergencies. "We have cable TV and the Internet, and we can reach many people quickly."

The state has recognized the issues. In February 2006, Governor Mitt Romney created the Massachusetts Coastal Hazards Commission to review practices and policies, identify information gaps, and draft recommendations for improvements.

In May 2007, the commission released its final report, including a series of recommendations to help safeguard coastal areas. They included updating coastal maps to pinpoint risk and measure rising sea levels due to climate change; modeling potential damage from future storms to alert communities; and providing incentives, such as insurance discounts, for homeowners along the coast to retrofit their homes against storms.

Peter Judge, public information officer for the Massachusetts Emergency Management Agency, the successor to the Massachusetts Civil Defense Agency, said that after the '78 storm, Governor Michael Dukakis issued an executive order creating an emergency management team. It includes federal, state, and local officials, including liaisons from a dozen state agencies, and meets regularly.

"I think if there's two areas we've improved in since 1978, it would be in communication and coordination," said Judge.

In 1978, some people didn't believe the forecast or disregarded it, and thousands were trapped on roads or in makeshift shelters such as car dealerships and restaurants.
"We can't stop people from going out into the storm, but we can let them know what they're in for," said Judge.

Rich Fahey can be reached at faheywrite@yahoo.com

April 2008 MA Auto Insurance FAQ's

2008-02-05T15:40:00.000-05:00

Do you have questions about the upcoming auto insurance changes effective in Massachusetts on April 1, 2008? Get the facts here, and contact us for more information.

Drivers should consider rental car insurance

2008-01-31T17:13:00.000-05:00

Local repair centers juggle an influx of winter customers
By DEBBIE KELLEY
THE GAZETTE
January 31, 2008 - 12:48AM

Slick roads from a regular cycle of wintry storms have caused pileups at local auto body shops.

Red Noland Collision Center is booked until mid-February to repair wrecked cars that are drivable, said Dale Francis, body shop manager. It’s one of the city’s largest dealership-owned collision centers, with a 25,000-squarefoot shop, 30 employees and $6 million in revenues last year.

Vehicles that have to be towed to the shop are accepted immediately but can take a month to six weeks to get fixed, Francis said. “It’s unusual for us to be backed up this far, but we can only schedule so many cars — we can do 230 a month,” Francis said.

“You can just see customers’ eyes twitch — it’s already a negative situation — when we tell them we’re looking at six weeks. They just can’t believe it.”

That’s why motorists should have rental-car insurance to defray the cost, State Farm Insurance agent Mark Campbell said. About 75 percent of customers at Wilson’s Auto Collision Inc. have rental-car insurance, said Ray Wilson, owner of the shop founded 22 years ago Friday.

“We tell them to call their agent to see if they qualify, because out-of-pocket rental is expensive and rental-car coverage isn’t,” Wilson said.

Various roadblocks can delay restoring a vehicle to its pre-crash condition, whether it was involved in a minor fender bender or a rollover. For example, Campbell said the insurance claim process can stall if the insurance company has to order an accident report from the police to verify fault.

Securing an appointment at a local body shop and getting parts to make the repairs also can add time. Severely damaged vehicles sometimes need parts that can’t be found in local parts stores, Francis said.

Wilson said his 14 employees are working as fast as they can, but they also are running several weeks deep in appointments. It’s the same at Black & White Auto Body & Paint, said Rick Lujan, owner and general manager of one of the city’s largest independents.

“You don’t need a lot of snow — just a couple of inches on the ground make a huge difference for body shops,” he said.

This winter has been more treacherous for local drivers than last winter, which brought several major blizzards, because motorists tend to stay off the roads during blizzards but feel more confident to venture out when snowfall is lighter, Lujan said.

To handle his shop’s load, Lujan has added four technicians for a total of 20 employees. “People don’t like to wait too long,” he said.

But it’s hard for auto body shops to gauge business volume, Wilson said.

“Everybody seems to get in a wreck that morning of a storm. Customers don’t just trickle in — they come all at once, and all of a sudden you’ve got an overflow,” he said.

Along with having to endure longer wait times, many motorists needing body work have high deductibles that must be paid out-of-pocket. Higher deductibles lower auto insurance premium costs, and Francis said he’s seen deductibles as high as $3,000.

It doesn’t take much of an impact, said State Farm’s Campbell, for the repair bill to top $1,000.

Lujan said it’s not unheard of for his body shop to fix a vehicle with $12,000 to $15,000 in damage.

And though winter brings a flurry of business, it’s not necessarily the busiest season for collision centers. About 11,000 cars in the area were damaged in a hailstorm last summer, Francis said.

As Wilson said: “It’s the snow and ice now. It’ll be the wind and sand damage in the spring, hail in the summer, then back to snow. Being weather-related is just the nature of our business.”

Mass. Allows Rates and Commissions of 2 Largest Auto Insurers

2008-01-30T08:01:00.000-05:00

By Andrew G. Simpson
Insurance Journal

The two largest auto insurance writers in Massachusetts have been given the green light to use the rates they filed for 2008 in rulings that characterize the state attorney general's objections as "irrelevant" in the state's new competitive marketplace.

The rulings also preserve contingent commissions for agents.

Massachusetts Insurance Commissioner Nonnie Burnes has ruled in favor of Commerce Insurance and Safety Insurance over the protests of Massachusetts Attorney General Martha Coakley, whose lawyers had tried to persuade Burnes that items contained in the two insurers' rate filings led to rates that were excessive even though they both filed for overall decreases.

The rulings mean the two insurers may proceed to market using their filings, which called for an average rate decrease of 8.1 percent by Commerce and an average 6.9 percent cut by Safety.
Commerce is the largest auto insurer with 31.6 percent market share, while Safety ranks second with 11.2 percent.

In declining to disapprove the insurers' rate filings, Burnes also handed independent agents' a victory by upholding the inclusion of contingent commissions as part of the rate filings. Coakley's team had argued that contingent commissions should not have been part of the rates.

Until this year, auto insurers had their rates fixed and established by the insurance commissioner. But beginning in April, 2008, insurers are being allowed to compete using their own rates under a new managed competition system. Insurers file individual rates which become effective unless the commissioner disapproves them.

The attorney general has the right to trigger rate hearings on individual insurer rate filings she deems excessive, which Coakley did in the cases of Commerce and Safety, but the final decisions rest with the commissioner.

Coakley objected to provisions for profit, expenses including contingent commissions, and loss trends used by the two insurers in their rates.

But Burnes dismissed the AG's entire analysis, ruling in favor of the insurers on each provision. Burnes suggested that while the AG's approach might have worked under the previous fix-and-establish system, it was irrelevant under the new managed competition system and that the AG "fails to recognize" that the rules have changed.

Burnes said that while the attorney general wants to challenge individual provisions of rates, as was done under the previous system, a competitive system requires a broader view.

"I do not set the rates under c. 175E [the rate statute]. My authority is limited strictly to disapproving a rate or, under very limited circumstances set forth in the statute, approving it. I look at the proposed overall rates generated by the rate filing viewed as a whole in determining whether a company's proposed rates are excessive for the insurance provided," Burnes wrote.
She further explained how her approach under managed competition differs from that taken in the past in her discussion of the Commerce profit provision:.

"It is not my task to look at aggregate industrywide data for the purpose of developing an underwriting profits provision that reasonably reflects the average financial needs of a mythical 'Every Company,' but is specific to none."

Her analyses of the expense and loss trends provision used similar language.

The attorney general had attacked the inclusion of contingent commissions for agents as "creating serious potential conflicts of interest and leading to anticompetitive effects such as the steering of business away from more cost effective carriers." Coakley's lawyers had also argued that because decisions fixing and establishing rates did not allow them to be included, contingent commissions should continue to be rejected in a competitive environment.

But Burnes said that such past decisions are immaterial to the current situation and since such commissions are legal, if insurers decide they want to pay them in a competitive market, they can.

"Contingent commissions now are one basis for legitimate competition in the industry. Indeed, that is why the Division's rate filing instructions explicitly provide for the possibility of such an expense. It is neither my role, nor the role of the Attorney General, to decide what expenses a company should incur in a competitive insurance market provided no such expenses violate the law. Companies that unwisely spend money will enjoy less success in the market, and this experience alone will alter future conduct," Burnes wrote.

Note: Plans submitted by all admitted carriers have now been approved. Contact us for more information.

LETTER: Industry could be winner on auto insurance

2008-01-22T13:47:00.000-05:00

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

Driving Safely When the Snow Sticks

2008-01-22T13:26:00.000-05:00

By Dan Zak

Washington Post Staff Writer

I learned to drive in wintry weather by growing up in Buffalo, which is the same thing as saying, "I learned to surf by growing up on the North Shore of Oahu." Freezing rain, fresh powder, whiteouts, downed branches coated with ice -- I've piloted a vehicle through almost every winter climatological situation.

Many Washington residents who are transplants from more temperate regions have not. Most of the area's snow falls during January and February, so get ready by considering the following advice from AAA's mid-Atlantic office and Car Guys in Rockville, which offers a semiannual course on hazardous driving geared toward teenagers ( http://www.decisivedriving.com).
Driving in winter is about physics and finesse, says John Townsend, manager of public and government affairs at AAA Mid-Atlantic.

"It's like a ballet," says Townsend, who lives in Prince George's County. "In other words, you almost have to become like an athlete: You don't want to be very tense, and you don't want to be overly confident. But you need to be in a zone. You need to be one with the vehicle. It has to be an extension of your limbs."

So read on. Keep it together. You'll be fine. But first and foremost: If you don't have to drive in wicked weather, stay the heck off the roads.

Before Hitting the Road

Have a snowbrush (with an ice scraper) in your trunk. I mean, obviously, right? But I've seen plenty of people trying to de-ice windshields with credit cards. Not effective.

Check your owner's manual, which may contain tips for driving your vehicle in snow and ice. "You will be surprised at the number of car owners who never look at those pages," Townsend says. "It is the last thing on their minds."

Pack an emergency kit and keep it in your vehicle throughout the winter: blankets, a sleeping bag, gloves, hats, wrapped nonperishable food (such as granola bars), bottled water, any medication you might need, a charged cellphone and the number for your insurance company's towing service or AAA. A sudden snowstorm can strand you, so be prepared for cold, hunger and the need to call for help.

Make certain your tires are properly inflated. Heck, do this regardless of the time of year.
Try to keep your gas tank at least half full to avoid running out of gas if you're snarled in traffic or stranded. (You need gas to keep the heat on, after all.) Also, this helps prevent a frozen gas line.

Practice. When it snows, find a nearby empty parking lot and get a feel for how your vehicle handles. Take note of how the brakes react on ice, how you need to alter or steady your steering on slick turns, and so on. "You have to learn it and feel it," says Aryan Azarsa, owner of Car Guys. "You can't sit behind a laptop and become a great driver. You actually have to do it."

Behind the Wheel

Slow down. Traction control, anti-lock brakes and ot her winter features are great, but they are no substitute for containing your speed. "People think anti-lock brakes are good for as fast as you go, but really it's only good up to 40 miles an hour," Azarsa says. "You may have traction control, but if you add too much speed, it's still rubber against asphalt."

Accelerate and decelerate slowly. Applying the gas gingerly is the best method for retaining traction and avoiding skids. Don't feel rushed to get going. Giving yourself more room to stop will allow you to brake more gently (and thereby avoid sliding).

Increase the distance between you and the car ahead. It should take at least eight seconds for you to pass the same spot on the road. That means no tailgating.

Use the threshold braking method, whether or not you have anti-lock brakes: Keep your heel on the floor and use the ball of your foot to apply firm, steady pressure on the brake.

Don't stop if you can avoid it. If you can slow enough to keep rolling until a stoplight changes, do it. There's a big difference in the amount of inertia it takes to accelerate from a full stop and the amount it takes to accelerate while rolling. It could be the difference between spinning your wheels and effortlessly resuming normal speed.

If you skid, always look and steer where you want to go. Don't try to rock the steering wheel or overcorrect.

Don't go all Chuck Norris on a hill. You'll spin your wheels if you apply extra gas on snowy roads. Try to get a little momentum before you reach the hill and let it carry you up. As you reach the top, reduce your speed and go down the hill as slowly as possible.

That said, don't be a nervous Nellie on a hill. If you get nervous, just keep moving. Don't brake on a hill unless you come to a stop sign or a light. If you must stop, tread tentatively. "The worst thing to do is step on the gas and break traction," says Lon Anderson, director of public and government affairs at AAA Mid-Atlantic. "You don't want to start by spinning. The best hope for getting going is a very, very slow and gentle beginning." If your wheels keep spinning, sometimes the only option is to reverse (if possible) back downhill, gain traction on level ground, then make another run at the hill. Or simply find another route.

Be doubly cautious in an SUV. Since they can weigh up to two to three times as much as a typical car, SUVs need more time to stop and have a higher center of gravity (meaning they're likelier than a sedan to tip over when negotiating a curve or a lane change on an ice-covered road). If you drive an SUV, brake earlier but gently and avoid jerky steering motions that can send the vehicle sliding.

If you drive a pickup truck or any other rear-wheel-drive car, place 60-pound bags of sand in the truck bed over the rear axles or the spot above the rear wheels to distribute the weight and prevent the back wheels from spinning.

Don't cut corners on insurance for your company

2008-01-18T13:01:00.000-05:00

Scripps Howard News Service
BY STEPHEN WINDHAUS

Over the years, many of my clients have purposely excluded insurance expense in the business planning process. Most were seeking outside capital investment, and they wanted to keep startup costs as low as possible. They soon learned no banker or venture capitalist is going to invest in your business, regardless of how attractive it may be, unless insurance is included. Even if the company doesn't need capital, there are certain conditions you do not want to face without insurance. Property loss, business interruption and liability are three good reasons to consider coverage.

PROTECT YOUR PROPERTY

The first form of coverage that comes to mind is property insurance for your building, inventory, equipment, machinery and vehicles. However, you want to pay close attention to the coverage offered. Do not assume that simply because the company owns no building, machinery or product inventory, that this form of coverage is not necessary. Other forms of property include vehicles, office equipment, furniture and cash (in the case of robbery). There are two types of property insurance coverage — standard and special, or all-risk. Standard insurance will cover each particular class of property. In other words, you would have to secure a policy for each category of property. Special, or all-risk coverage is a comprehensive policy that addresses all categories of property in a broader range of loss conditions.

Property insurance begins with you creating a list of all tangible assets, the present, appraised value and salvage value of each item. Submit this list to the insurance agent for review to insure the best of coverage at the lowest possible premium.

And here's a "heads up" for home-based business, including sole proprietors. The cost of home insurance is rising in many parts of the country. Make sure your agent examines that policy to avoid over-insurance. The home policy just may cover part of your business property.

WHAT HAPPENS WHEN THE LIGHTS GO OUT — BUSINESS INTERRUPTION

I have written about preparing the business for natural and manmade disasters. There are many things you can do to protect property and company data, but what happens when the business is interrupted for days, weeks or months because of a wildfire, hurricane, tornado or some other form of disaster. Just ask the business owners in New Orleans how long it has taken to open the doors and generate sales after Hurricane Katrina. A solution to this cash-flow nightmare is business interruption insurance. You can be certain the flood (forgive the pun) of natural disasters in recent years, combined with some recent predictions, that lenders and entrepreneurs alike are taking a closer look at this form of insurance.

LIABILITY

Generally, it is a common decision at startup to incorporate the business to protect assets from liability loss. But what is one to do when faced with legal responsibility from harm caused to others. This can result from actions or inactions by you or your employees that result in bodily injury or property damage It could be due to defective products, bad service or installation actions. With all due respect to the legal system, there are times when one lawyer conducts a better job than another. Innocence is no guarantee of winning the case. And how many times has a lawyer decided to settle out of court to avoid excess legal expenses? Regardless of guilt or innocence, you want to consider liability coverage.

SHOP AND COMPARE

My insurance needs have been serviced by only one agent in the last 18 years. Fortunately, he has taken good care of me, but don't think I haven't gone out to compare prices and coverage. Loyalty is a wonderful character trait, but business is business. You need to insure getting the best bang for the buck. Shop around and compare the premium costs to the coverage provided. And please stay within your budget.

And talk with an insurance broker who carries commercial liability policies, to see if there are some tailored to your industry or profession.

Stephen Windhaus is a small business consultant based in Port St. Lucie. You can contact him at steve@windhaus.com or (772) 871-0585.

LETTER: Koczera wrong on auto insurance

2008-01-16T12:08:00.000-05:00

Courtesy of SouthCoastToday.com
January 15, 2008 8:40 PM

It is unfortunate that responsible state policymakers continue to rely upon scare tactics and misinformation to oppose the efforts of the Patrick administration to reform the antiquated and anti-consumer Massachusetts auto insurance system. Rep. Robert Koczera's recent op-ed piece ("Auto insurance reform discriminates," Jan. 11) disappointingly relies upon such arguments.

Rep. Koczera is simply wrong that good drivers with spotless records, who are assigned to a company by the Massachusetts assigned risk plan, will not receive the benefits of lower rates. It is illegal for a company to charge such an assigned good driver any more than their policy premium would be were they insured by that company voluntarily.

Rep. Koczera ignores the fact that good drivers in Acushnet, for example, have been subsidizing bad drivers in New Bedford, and vice versa, under the present system, but has not previously found this objectionable.

Driving record is, in fact, a significant factor in the decision all companies make in offering rates, but even staunch opponents of competition in the Legislature acknowledge the impracticality of an auto insurance system based upon a single factor. That said, all the objectionable socioeconomic factors listed by Rep. Koczera have, in fact, been banned for use in determining rates and in underwriting policies.

Real competition, with more companies, more products and more consumer choices, necessitates a regulatory playing field that resembles at least modestly the playing field in the other 49 states of the nation. It is no accident that other big states, like New Jersey and Texas, scrapped their state-set systems in favor of competition and saw more companies compete and better rate offerings across the board.

Consumers can anticipate the same results here in Massachusetts, so long as well-intended but wrong policymakers do not stand in the way of the meaningful reform that the Patrick administration is bringing to the commonwealth's auto insurance system.

James T. Harrington
Executive Director
Massachusetts Insurance Federation
The writer lives in Dartmouth.

Replacement costs shock homeowners

2008-01-15T12:08:00.000-05:00

Read all about the MA Fair Plan and their calculations of home rebuild costs on Cape Cod.

By Sarah Shemkus
STAFF WRITER
January 15, 2008

Is your home properly covered? Contact us to find out.

Mass. Insurance Chief, AG Differ Over How to Regulate Auto Rates

2008-01-13T13:07:00.000-05:00

Massachusetts Insurance Commissioner Nonnie Burnes and Attorney General Martha Coakley are at odds over how best to regulate the state's new competitive auto rates.

Coakley thinks some insurers are being stingy with their rate cuts and wants to dig deeply into individual insurance company rate filings by obtaining background documents from the carriers.
Burnes say she's got everything under control and Coakley's tactics would only delay the day when consumers enjoy the fruits of a competitive system.

Burnes appears intent on keeping the rate approval process moving forward so carriers can begin marketing their new rates in time for the April 1 start date for competitive rating.

The rates for 14 of the 19 insurers writing private passenger auto have been approved after some review and revisions. But the rates for a few other insurers, including some of the larger writers, remain under scrutiny.

Hearings began this week into the rates of Commerce, the state's largest auto insurer. Hearings into the filings of Arbella Mutual Insurance Co., Safety Insurance Co., Premier Insurance Co. of Massachusetts, and Hanover Insurance Group are scheduled for later this month.

The insurance department has already approved the filings for Arbella and Safety but they are being further reviewed at Coakley's insistence.

Commerce has filed for an average decrease of 6 percent. Coakley claims the company could lower rates more than that.

The different approaches of the two public officials have been on display in recent legal moves and at a hearing on Commerce's rates this week in Boston.

At the hearing, Burnes oversaw questioning of Commerce officials by Assistant Attorney General Peter Leight. She appeared impatient with his lengthy questioning, at one point remarking that motorists are "never going to get decent rates" if the state prolongs the process.

The differences between the two also played out in legal maneuvering by Burnes, a former judge, and Coakley, a former prosecutor.

Coakley's office had wanted more ammunition to question officials of Commerce and the other insurers about their ratemaking. The attorney general had first sought to obtain background materials from Commerce by asserting the legal right of discovery. After Burnes, rejected that assertion, Coakley issued subpoenas to Commerce for certain documents. Burnes also blocked that move.

Coakley and consumer advocates say Burnes' moves could restrict her agency's ability to represent consumers in rate hearings.

"Our goal in calling for hearings on Commerce's and other insurers' rate filings was to bring transparency to the rate-setting process under the new managed competition system," Coakley said. "We are very concerned that our office's inability to acquire appropriate information is likely to render the hearings ineffective and does a disservice to consumers."

This is not Coakley's only attempt to expand her office's consumer advocacy reach. Legislation that included a provision to give the attorney general the power of discovery died in the Legislature last session, although it could be revived.

The Massachusetts Association of Insurance Agents, opposed that legislation. Frank Mancini, president and chief executive officer of the trade group, said the denial of discovery was a "victory for consumers and agents" for several reasons.

First, he said, the resulting delays brought about by discovery could have meant that the insurers with rates subject to hearings would not have been able to compete for business with their lower 2008 rates come April but would have had to use their higher 2007 rates. Given that the carriers under review represent almost 40 percent of the marketplace, that could have denied consumers the benefits of competition and put those carriers at a competitive disadvantage, he said.

Also, Mancini said, had Coakley been granted the right of discovery, he believes she would have gone hunting after agent commission data. "I have been telling our members that if that discovery had passed, every one of their commission agreements would have been on Coakley's desk," he told Insurance Journal.

Before the Commerce hearing began, the insurance department officially cleared the filings of four insurers, bringing the total now approved to 14.

"The rates on file have withstood the Division's extensive review process and mark the beginning of a new era of consumer savings and consumer choice in the state's auto insurance market," said Burnes.

The insurance department said it continues to review the proposed rates of the remaining insurers.

See comments on this article in The Insurance Journal

First auto insurance rate-setting hearing opens

2008-01-10T13:11:00.000-05:00

By Jeffrey Krasner
Globe Staff / January 10, 2008

Insurance Commissioner Nonnie S. Burnes yesterday kicked off the first rate-setting hearing under a new auto insurance system that allows insurers to set their own rates, subject to government oversight. Attorney General Martha Coakley had called for the hearing to examine rates filed by Commerce Insurance of Webster, the state's largest auto insurer.....read the full article here.

R.I. firm offers policies on Cape, coastal areas

2008-01-09T15:39:00.000-05:00

By Kimberly Blanton
Globe Staff / January 9, 2008

Click here to read about the Narragansett Bay Insurance Company - an option for homeowners who live in coastal areas.

To obtain a quote from Narragansett Bay Insurance Company, contact The Howes Insurance Agency.

Mass. AG Sues Great American For Bid-Rigging

2008-01-08T14:34:00.000-05:00

BY DANIEL HAYS
NU Online News Service, Jan. 7, 3:41 p.m. EST

The Massachusetts Attorney General’s Office has filed a lawsuit against Cincinnati-based Great American Insurance Group, alleging it rigged an insurance bid with a broker to defraud a Norwood, Mass.-based technology firm.

Reacting to Friday’s action--filed at Suffolk Superior Court in Boston against Great American and its Chicago-based subsidiary, Professional Risk Brokers--the insurer said it denied wrongdoing and would fight the charges.

The announcement of the action by Attorney General Martha Coakley said she was seeking a court order prohibiting the company from engaging further in unfair and deceptive business practices, along with restitution, attorneys’ fees and civil penalties up to $5,000.

The state’s complaint charges that in 2004, at the request of insurance broker Marsh Inc.--part of Marsh & McLennan Companies--Great American submitted a fake and intentionally uncompetitive quote to semi-conductor manufacturer Analog Devices.

According to the attorney general’s statement and complaint, Great American allegedly submitted a fake $450,000 bid to make a $400,000 bid from American International Group for a $25 million layer of insurance look competitive, and Marsh reciprocated by steering another one of Analog Devices’ insurance policies to Great American at a pre-determined price of $60,000.

The lawsuit cited as evidence internal Marsh e-mails, and e-mails between Marsh and Great American’s PRB unit.

Great American is the latest in a long list of insurance carriers accused of rigging bids with Marsh and paying the brokerage off with hefty commissions for business that was sent its way.

In 2005, the New York-based brokerage, following investigation by the New York Attorney General’s Office into Marsh’s commercial insurance business practices, agreed to pay $850 million into a restitution fund to repay injured clients and stop taking contingent commissions, which allegedly served as kickbacks.

Ms. Coakley’s office said insurers such as Great American paid Marsh lucrative contingent commissions based on the volume of business placed with them.

The state’s suit is being handled by attorneys for the attorney general’s Insurance and Financial Services Division and Health Care Division.

Great American representatives said the carrier was “disappointed” a suit was filed over “one quotation for insurance coverage made in the spring of 2004 and contingent commission payments made to the producer for the account.”

“Great American's conduct in issuing that quote was lawful,” the carrier added. "The Company has cooperated with the Attorney General's investigation and has tried for an extended period of time to reach resolution of the issue without litigation.”

The firm said it had “resolved and been released from any potential issue” with Analog Devices. However, the state’s complaint said the monies involved in that settlement “do not represent the full harm suffered by Analog Devices, nor the full ill-gotten-gains of Great American.” The settlement amount was not disclosed.

Great American said it “believes that the demands of the Attorney General's Office have been unreasonable. Thus, the Company intends to vigorously defend itself against the Attorney General's allegations."

Members of the Great American Insurance Group are subsidiaries of American Financial Group Inc., based in Cincinnati.

Social insecurity: Web sites teem with ID numbers

2008-01-07T14:15:00.000-05:00

Many records posted online

By Bill Brubaker
The Washington Post

WASHINGTON -- Colin Powell's Social Security number is out there. So is Troy Aikman's. And that of Maryland Democratic Attorney General Douglas Gansler, among many others.

In an era when government officials from President Bush to local sheriffs warn of the growing dangers of identity theft, the full Social Security numbers of untold numbers of Americans can be found in file rooms and on Web sites run by, well, governments.

"This is very dangerous," Gansler said after learning that his number had been posted on a Maryland government-record site. "You know, a Social Security number is really the fingerprint to somebody's identification."

The Federal Trade Commission has estimated that 8.3 million Americans were victims of identity theft in 2005, the most recent for which data are available. But the crown jewel in identity theft -- the Social Security number -- can be mined easily in the government's own records, creating a measure of social insecurity for millions, according to identity experts.

Social Security numbers are readily available in many courthouses -- in land records and criminal and civil case files -- and also on many government Web sites that serve up public documents with a few clicks of the mouse. From state to state, and even within states, there is little uniformity in how access to the private information in these records is controlled.

A recent spot check found the nine-digit numbers -- introduced in 1936 to track employee earnings and benefits -- on hundreds of land deeds, death certificates, traffic tickets, creditors' filings and other documents related to civil and criminal court cases.

Old records spill secrets

Federal courts have banned the use of Social Security numbers from public documents since 2001. And in recent years, many jurisdictions have enacted laws or made rules barring various types of personal information from being filed with courts or government agencies. Most court Web sites in the Washington region list partial Social Security numbers or none at all.

However, millions of paper records were filed across the United States before the laws and rules took effect. Generally, such records are not covered by the prohibitions. And court clerks said it would be virtually impossible to redact all of the Social Security numbers.

"That's just plain nutty," said Wendy Jones, former acting clerk of Prince William County Circuit Court in Virginia. "I mean, we're talking about hundreds and hundreds of thousands of files in our court alone."

In Virginia's Loudoun County General District Court, Social Security numbers were found on documents filed in 38 of the 48 criminal cases heard by a judge on a recent day. The numbers were typed or written on summonses, arrest warrants, criminal complaints, and jail commitment and release orders, among other documents.

"I don't like it. I don't like it at all," said the court's clerk, Judith Waddell. "Would you like your Social Security number being disclosed to the public? I know I wouldn't."

A one-hour search of Maryland's land-record Web site found the Social Security numbers and signatures of two dozen property owners.

"It's alarming, because the government should be setting the example in really trying to protect people's private information," said state Sen. Jamie Raskin, D-Montgomery. "Look, there's a whole criminal underground now that thrives on stealing people's credit cards and usurping their identity for as long as they can."

4 numbers in 15 minutes

A 15-minute search on the Maryland Department of Assessments and Taxation Web site found Social Security numbers on statements filed by creditors who had financed purchases by four consumers in Waldorf, Cambridge, Bowie and Landover in 2003 and 2004.

A dozen more numbers, including former Secretary of State Powell's, turned up on a Fairfax County, Va., site that requires a $25 monthly subscription fee.

A Texas land-record site had the Social Security number of Aikman, the former Dallas Cowboys quarterback and now a Fox Sports analyst.

Identity fraud has been around for centuries. But widespread use of credit cards and the growth of the Internet have led to a plague that costs businesses and individuals billions of dollars a year. And the problem took a giant leap in the public consciousness after the Sept. 11, 2001, terrorist attacks, when it was revealed that several hijackers had used fraudulently obtained IDs to open bank accounts, rent apartments and board planes.

The federal government responded with a 2004 law that mandated prison sentences for people who use identity theft to commit other crimes and prohibited Social Security numbers from being displayed on newly issued driver's licenses.

Last spring a presidential task force called on federal agencies to "reduce the unnecessary use" of Social Security numbers, which it called "the most valuable commodity for an identity thief."
But with a few keystrokes, anybody can view the deed to Jamie and Sarah Raskin's house in Takoma Park, Md.

Jamie Raskin, a state senator, said that when he refinanced the house in 1994, he gave no thought to the two Social Security numbers printed on his deed. But last March, he got a call from Betty "B.J." Ostergren, an activist from central Virginia who pushes lawmakers and government agencies to take sensitive personal data off state-run Web sites.

"She said, 'Do you know I was able to find your Social Security number and other private information about you and your wife online?' " Raskin said. "I was shocked, and I briefly flipped out, because, you know, these are days when everybody's privacy is under assault."

Helping criminals out

Ostergren's site, thevirginiawatchdog.com, offers dozens of examples of public figures whose Social Security numbers have appeared in public records in recent years. They include former CIA Director Porter Goss.

"The government loves to spoon-feed criminals by putting these dern records on their Web sites," Ostergren said.

Raskin said he plans to call for legislation that would give Maryland residents the right to request redaction of their Social Security numbers from public records.

"The public certainly has the right to know who owns a particular property," he said. "But I don't think the public has the right to know what that person's Social Security number is."

Contact The Howes Insurance Agency for protection against identity theft

2008-01-04T12:51:00.000-05:00

By JACK SHEA, Vineyard Gazette

New home construction costs on the Island could increase more than 10 per cent as a result of new state building codes requiring one and two-story buildings to withstand winds of 110 miles per hour beginning Jan. 1.

For some prospective home owners and builders, the changes have already blown away their plans.

Tisbury building inspector Kenneth Barwick said he already has heard from home builders on a budget.

“People have called me to say they cannot afford to go forward,” Mr. Barwick said. “The new rules will significantly accelerate the cost of construction, materials and professional services. The days of pulling the three-bedroom Cape plan out of the closet are over, unfortunately.”

The new building code rules were issued, with last-minute amendments last week, by the state board of building regulations and standards.

The new seventh edition of the state building codes increased structural wind resistance requirements from 90 to 110 mph. The code also created a wind-debris zone one mile inland from mean tide in which houses must be able to handle winds of 110 mph. The new zone could affect the location of new houses relative to the prevailing wind direction and requires more stringent construction methods than houses constructed more than one mile inland.

The new code, four years in the adopting, also increases the requirements for fastening or “tie down” of foundations, walls and roofs as a single unit to reduce wind shear or vertical lift in houses under heavy winds.

Edgartown building inspector Leonard Jason Jr. also noted changes in plumbing and electrical safety wiring and outlets that he said will add some cost to construction.

He said the state also intends to institute new licensing in July for shingling, siding, window installers, roofing and demolition work. A grandfather clause is likely to be included in the license changes, as Mr. Jason reads the prospective license procedures.

Island building inspectors processed a flurry of building permit applications before the end of the year under the sixth edition of the codes and before the new regulations took effect. Harried building inspectors in Edgartown and West Tisbury in particular processed several dozen applications by builders in the final two weeks of 2007 who were seeking to be regulated under the sixth edition building rules.

To complicate matters, the final codes were e-mailed by the state to building inspectors just before they were to take effect.

A principal cost increase for homeowners and builders will come through the cost of windows, which must now be laminated, similar to the glass used in skylights. In some cases, that could double window costs.

Windows typically account for 10 to 18 per cent of construction costs, according to an informal survey of Island builders this week.

Connie O’Doherty, owner of Butterwood Properties Inc., a high-end Edgartown contractor, reported quotes given him for a mid-range standard window would double the cost. Mr. O’Doherty noted, as did several building inspectors, that the changes in window requirements have window makers scrambling to retool in order to meet the new codes.

Despite state extension of the new code deadline from last April 1to Jan. 1, the state did not complete the code until literally at year-end. “The guys the state usually send to educate us are good. I get the feeling they are embarrassed,” Mr. Jason said.

Indeed, additions, amendments and clarifications, many by e-mail, have been trickling across building inspector desks over the past week, frustrating their efforts to answer queries clearly.

For the past week, more detail in the code has become clear as inspectors dealt with analyzing new regulations while processing permits under the old regulations. The complete building code is about 1,600 pages.

West Tisbury building inspector Ernest P. Mendenhall surmised early last week that the code will likely require more services from engineers and architects and more inspection.

“Under these regulations I’ll be at building sites at least once or twice more because of increased regulations with regard to fastening components,” he said.

Mr. Jason and Mr. Barwick concurred. Mr. Barwick noted that newer regulations for small variances in cantilevering, for example, will require an engineer’s stamp, representing a new cost for home builders.

“The code is going to require more engineering and architects, depending on the size of the house,” he said. “Simple repairs and additions will cost more.”

Mass. High Court Upholds 2006 Home Insurance Hike for FAIR Plan

2008-01-03T16:46:00.000-05:00

The Massachusetts Supreme Judicial Court has upheld the 2006 rate increases for the state's homeowners residual market insurer, the FAIR Plan, against a challenge by the attorney general that the increases violated a state law placing caps on increases.

That rate decision in dispute granted the Massachusetts Property Insurance Underwriting Association (or FAIR plan) by then-Commissioner Julianne Bowler a 12.4 percent statewide hike and 25 percent on the Cape effective October 1, 2006.

Attorney General Martha Coakley's office had pursued an appeal of the rate increase that was begun by her predecessor Tom Reilly.

That rate hike was the first since the Massachusetts Legislature amended the FAIR Plan statute in 2004 to eliminate rate caps for the 13 largest share territories by allowing predicted hurricane losses and the cost of reinsurance to be factored into the rate.

The Attorney General had contended that the rates approved by the commissioner exceed the cap on rate increases set by statute, and disputed the commissioner's interpretation that a 2004 amendment authorized her to approve rates that exceed the cap after weighing predicted hurricane losses and costs of catastrophe reinsurance.

Coakley's office had also claimed the commissioner abused her discretion in approving predicted hurricane losses based on the computer generated models relied on by MPIUA.

Since that filing for 2006, the FAIR Plan has requested another 25 percent homeowners insurance rate increase for Cape Cod residents, part of an overall statewide filing seeking a 13.6 percent average rate increase statewide.

The FAIR Plan, which provides coverage to homeowners unable to secure insurance in the private market, insures more than 130,000 homeowners statewide, including a third of all homeowners on Cape Cod.

Coakley expressed concern regarding the 25 percent rate increase for Cape Cod and has recommended a statewide average premium decrease of 18 percent. This proposal includes a 29 percent decrease for residents in Cape Cod and surrounding islands.

Survey: Teens Want Friends to be Safer on Roads

2008-01-02T09:08:00.000-05:00

With motor vehicle accidents claiming between 5,000 and 6,000 teen lives each year, a new survey commissioned by Allstate Insurance reveals that many teens do not take personal responsibility for safe driving and continue to engage in dangerous driving behaviors.

While nearly 90 percent of teens surveyed said they hope their friends will be safer on the road in 2008, just 11 percent included "driving more safely" among their personal New Year's resolutions. One-third (34 percent) of teens surveyed reported being frightened as a passenger because the driver was being careless, but did not say anything to the driver.

"Our survey found that teens are making New Year's resolutions about getting better grades, exercising more and other good things, but far too few are resolving to be safer drivers," said Victoria Dinges, Allstate assistant vice president of Public Social Responsibility and mother of a teen driver. "Car accidents are the leading cause of death for teens in the U.S., and the holidays are among the most dangerous times of the year for teens on the road. Unfortunately, our survey shows that teens have other things on their mind than driving safely."

According Allstate's survey, approximately 40 percent of teens surveyed plan to exercise more and 40 percent hope to improve their grades, while only 11 percent will resolve to drive safer in 2008, ranking dead last in the survey.

Fifty-seven percent of respondents admitted to driving more than 10 miles per hour over the speed limit, 22 percent have raced another vehicle and 19 percent have received a traffic ticket. Eighteen percent of respondents admit to being a passenger in a car being driven by a teen who was under the influence of alcohol or drugs.

Further supporting the importance of peer influence that exists among teen drivers who are willing to break the law yet want their friends to drive safer, respondents were specifically interested in having their friends eliminate unsafe practices including driving without seatbelts (41 percent) and speeding (40 percent). And, while teens may be excited about the new MP3 player their friend as a holiday gift this year, they don't want them distracted by it while driving. More than two-thirds of teens surveyed said they wanted their friends to avoid technology distractions (i.e. texting, talking on a cell phone, and scrolling through an MP3 player) while driving.

"These are alarming results considering every year for the past decade between 5,000 and 6,000 teenagers were killed in motor vehicle accidents. No other hazard or behavior comes close to claiming as many teen lives," Dinges said. "As we reflect on our lives and see what we can be doing better for the upcoming year, encouraging safe driving is a great conversation for parents to hold with their teens. Parental guidance and involvement in these first and defining years is critical for young drivers."

Allstate said a recent study published by the National Institute of Child Health and Human Development indicates intervention materials, such as a parent-teen driving agreement for newly licensed drivers, reduces high-risk driving behaviors such as texting.

The Allstate survey also shows that many teenagers are familiar with drivers contracts and that nearly one third (30 percent) of teens who have heard of these agreements have signed one. The dialogue that the contract opens – dialogue that needs to be sustained between parents and teens – can be just as important as the signed agreement.

"By opening up a dialogue with teens, parents can influence their child's behavior – and nearly half of teens are having 'good conversations' with their parents about the importance of safe driving," said Dinges. "However, the research shows the dialogue needs to be frequent and meaningful; a parent-teen driving contract is a good starting point for these discussions."

Source: Allstate

Penalties Increase For Residents Without Health Care

2008-01-02T09:03:00.000-05:00

Yearly Fines Could Be High
The Associated Press, January 1, 2008

BOSTON -- The cost of not having health insurance in Massachusetts has gone up.
As the new year began, most residents who remain uninsured will face yearly fines that could total as much as $912 for individuals and $1,824 for couples by the end of 2008.

That's according to penalty guidelines unveiled by the Department of Revenue.

Individuals who failed to sign up for health insurance by the end of 2007 faced only a one-time loss of their $219 personal income tax exemption.

The fines are part of an increasingly aggressive approach written into the health care law designed to pressure Massachusetts residents into getting insurance.

It remains unclear how many Massachusetts residents still don't have insurance, but the number could be in the hundreds of thousands.

Those overseeing the law say the state has added about 300,000 Massachusetts residents to the ranks of the insured this year.

Reports of data breaches reached new heights in 2007

2007-12-31T11:17:00.000-05:00

By Mark Jewell, Associated Press (Courtesy of USA Today)

BOSTON — The loss or theft of personal data such as credit card and Social Security numbers soared to unprecedented levels in 2007, and the trend isn't expected to turn around anytime soon as hackers stay a step ahead of security and laptops disappear with sensitive information.

And while companies, government agencies, schools and other institutions are spending more to protect ever-increasing volumes of data with more sophisticated firewalls and encryption, the investment often is too little too late.

"More of them are experiencing data breaches, and they're responding to them in a reactive way, rather than proactively looking at the company's security and seeing where the holes might be," said Linda Foley, who founded the San Diego-based Identity Theft Resource Center after becoming an identity theft victim herself.

Foley's group lists more than 79 million records reported compromised in the United States through Dec. 18. That's a nearly fourfold increase from the nearly 20 million records reported in all of 2006.

Another group, Attrition.org, estimates more than 162 million records compromised through Dec. 21 — both in the U.S. and overseas, unlike the other group's U.S.-only list. Attrition reported 49 million last year.

"It's just the nature of business, that moving forward, more companies are going to have more records, so there will be more records compromised each year," said Attrition's Brian Martin. "I imagine the total records compromised will steadily climb."

But the biggest difference between the groups' record-loss counts is Attrition.org's estimate that 94 million records were exposed in a theft of credit card data at TJX Cos., the owner of discount stores including T.J. Maxx and Marshalls. The TJX breach accounts for more than half the total records reported lost this year on both groups' lists.

The Identity Theft Resource Center counts about 46 million — the number of records TJX acknowledged in March were potentially compromised. Attrition's figure is based on estimates from Visa and MasterCard officials who were deposed in a lawsuit banks filed against TJX.

The breach is believed to have started when hackers intercepted wireless transfers of customer information at two Marshalls stores in Miami — an entry point that led the hackers to eventually break into TJX's central databases.

TJX has said that before the breach, which was revealed in January, it invested "millions of dollars on computer security, and believes our security was comparable to many major retailers."

With wireless data transmission more common, hackers increasingly are expected to target what many experts see as a major vulnerability. Eavesdroppers appear to be learning how to bypass security safeguards faster than ever, said Jay Tumas, the head of Harvard University's network operations, at a recent conference for information security professionals.

"Within a year or two, these folks are catching up," Tumas said.

The two non-profit groups' 2007 data also show rising numbers of incidents in which employees lose sensitive data, as opposed to cases of hacking.

Besides TJX's problem, major 2007 breaches include lost data disks with bank account numbers in Britain, a hacker attack of a U.S.-based online broker's database and a con that spilled resume contact information from a U.S. online jobs site.

"A lot of breaches are due to inadequate information handling, such as laptop computers with Social Security numbers on them that are lost," Foley said. "This is human error, and something that's completely avoidable, as opposed to a hacker breaking into your computer system."

Attrition.org and the Identity Theft Resource Center are the only groups, government included, maintaining databases on breaches and trends each year. They've been keeping track for only a handful of years, with varied and still-evolving methods of learning about breaches and estimating how many people were affected.

Despite those challenges, the two non-profits say it's clear 2007 will end up a record year for the amount of information compromised, because of greater data loss and increased reporting of breaches.

Both groups acknowledge many breaches may be missing from their lists, because they largely count incidents reported in news media that they consider credible. Media coverage has risen in part because of the growing number of states requiring businesses and institutions to publicly disclose data losses. Thirty-seven states, plus Washington D.C., now have such requirements.
Because of proliferation of such laws, "it may take a year or two before things stabilize and we can see what's really happening," Foley said. "If that's the case, then we'll know whether businesses are practicing better information-handling techniques."

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