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.”
Thursday, January 31, 2008
Wednesday, January 30, 2008
Mass. Allows Rates and Commissions of 2 Largest Auto Insurers
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.
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.
Tuesday, January 22, 2008
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
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
By Dan Zak
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.
Friday, January 18, 2008
Don't cut corners on insurance for your company
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.
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.
Wednesday, January 16, 2008
LETTER: Koczera wrong on auto insurance
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.
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.
Tuesday, January 15, 2008
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