Agents Balk as Mass. Permits 6-Month Auto Insurance Policies

By | April 10, 2008

  • April 10, 2008 at 9:34 am
    Bob says:
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    Wow – comments all over the board on this one. My quess is that negative comments are from Bay Staters that are experiencing too much change all at once. Pro 6 month comments – maybe from out of staters who have experienced that “more options” are usually better for the consumer. From the “land down under Mass”(CT) we have options and that is a good thing!

  • April 10, 2008 at 10:09 am
    Mark says:
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    and as usual our lame duck legislature does nothing.

  • April 10, 2008 at 11:08 am
    expert says:
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    Insurance companies love, and want, six month policies for a simple, money, reason. They can apply rate increases sooner and the same applies to surcharges based on driving offenses – and not have to wait until the end of a one year policy to see the premium increases. The public gets nothing of additional value or benefit. Changing carriers for premium or other reasons can be done at any time.

  • April 10, 2008 at 11:25 am
    Actuary says:
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    So, “expert”, what direction are auto insurance premiums going these days? That’s right, down.

    And, while surcharges MAY roll on quicker (if the company pulls MRVs every six months, which few do), they will DEFINITELY roll off quicker.

    The reason insurers prefer six month policies is because it defers taxes and agent commissions (which is why the agents oppose this option in MA).

  • April 10, 2008 at 12:26 pm
    John says:
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    this six month thing will increase rates simply do to the processing involved. Seems like a terrible idea for all. Nonni Burnes is a strange person.

  • April 10, 2008 at 12:45 pm
    Jeff says:
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    I am in the policy processing business. There are additional costs, but they are not large. Typically renewal processing is far less than new business. As far as I know every other state allows 6 month processing. This is a substantial benefit for people with seasonal vehicles- like the ragtop you take off the road in September.

  • April 10, 2008 at 12:50 pm
    Actuary says:
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    Actually, six month policies should be cheaper, in the same way that variable interest rates are typically less than fixed rates. There is more uncertainty in the insurer’s costs over 12 months rather than six. The only reason six months policies won’t be sold at a less than half of the 12 month premium is that the state is prohibiting it.

    The overwhelming majority of auto insurance in the US is sold via six month policies.

  • April 10, 2008 at 1:09 am
    bluefin says:
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    Its really about our lame agents association.They have done nothing for us,I think the head of it is in bed with the big national carriers.

  • April 10, 2008 at 2:25 am
    Neighbor to the North says:
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    In some instances a 6 month policy is a huge benfit to the Insured, especially when a violation would “age off” before a 12 month renewal date. Don’t worry Mass Agents, you’ll get used to it and learn to like it!

  • April 10, 2008 at 3:18 am
    caffiend says:
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    When someone asks about a 6-month policy point out the advantages of staying with an annual policy vs the shorter term.

    A majority of companies reward customer loyalty on an annual basis (such as a 1-year loss free continuation discount) and that if the insured keeps hopping companies every 6-months they lose the chance at that discount.

  • April 10, 2008 at 3:19 am
    MJ says:
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    The state insurance dept will bend over to any carriers requests to get into the state. 6 month policies allow companies to write NB and worry about underwriting a risk until renewal. Trick of many online or direct carriers to save money on writing NB to see if it will stick. Also gives everyone more flexibility to change rates rapidly with little tweaks. You will find it is ultimately not good for the insurance dept or the public as rate changes will eventually go unmonitored or very lax monitoring.

  • April 11, 2008 at 8:08 am
    Steve -Do what's right says:
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    This will hurt the consumer overall in really knowing the true cost of a policy. The commissioner nor the industry is helping the consumer with this move.I may be wrong but I think this will confuse and cost the people the commissioner is trying to help.

  • April 11, 2008 at 2:05 am
    nick says:
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    If 6 months is good then 3 months is better????

  • April 14, 2008 at 7:50 am
    Alan says:
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    6 month policies cut both ways; rates can go up or down more quickly. Tickets fall on and off, and rate changes (up and down hit at a more rapid pace. Who cares? You guys seem REALLY concerned about the changing pace of market reforms. Try working like the rest of the country and get back to us. Alan



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