2005 MASS. AUTO RATES SET:

Massachusetts Insurance Commissioner Julianne M. Bowler issued a decision in the 2005 private passenger auto insurance rate case that will result in a statewide average rate decrease of 1.69 percent next year. The new rates take effect Jan. 1 and result in an average decrease of $18.30 per vehicle and a statewide average annual rate of $1,063.19. In her decision, Bowler began reducing the subsidy that experienced drivers now pay for inexperienced drivers, as she noted that claims frequency among inexperienced driver classes has grown dramatically. “With this decision, rates for inexperienced and bad drivers will be more reflective of the losses they cause and a financial incentive will finally exist for improving driving habits,” stated Bowler. A report by Tillinghast-Towers Perrin found that inexperienced drivers are charged significantly lower premiums than the costs associated with providing them coverage. Bowler also approved a 5 percent discount for drivers who complete an approved advanced driver training course. A 4.8 percent average increase in agent commissions was approved, raising the average commission per vehicle from $114.00 in 2004 to $119.50 for 2005. As a result of a separate decision, drivers at Safe Driver Insurance Plan steps 20 to 35 will receive an increase in the value of a surcharge. The additional revenue generated will be used to reduce surcharges applied to experienced drivers with one at-fault accident or moving violation that is greater than three years old.

Topics Auto