View this article online: https://www.insurancejournal.com/news/east/2008/10/17/94717.htm
Barely six months into Massachusetts’ new deregulated auto insurance system – one that supposedly favors consumers who shop around for the best rates – fewer than one in four drivers have actually done so, according to a survey sponsored the Massachusetts Insurance Federation, a trade group for insurers in the state.
Still, more than 70 percent of those surveyed said they preferred the new “managed competition” system, under which companies have wide flexibility in creating their rates, to the now-abolished system where regulators set all auto insurance rates.
“This shows that consumers are warming up to this new system and that among those aware of the changes, there is an overwhelming preference for competition and choice,” said MIF Executive Director James T. Harrington. “We also think that it is very significant that consumers prefer a managed competition system with more choices to the previous state-set rate system.”
Approximately 45 percent of those surveyed had not formed an opinion about the new system, although that may have been due to the survey’s having been conducted in July, when many respondents would likely not yet have renewed their policies under the new system.
“These results are impressive, but it is frankly not surprising that consumers are endorsing the benefits of competition, including lower costs and more choices,” said Paul Tetrault, Northeast state affairs manager for the National Association of Mutual Insurance Companies. “The success of the historic systemic changes in Massachusetts once again underscores the value of rate modernization.”
Other data from the survey:
— Fifty-two percent of respondents said their auto coverage was linked with another type of coverage with the same policy
— Fifty-six percent said they had not taken advantage of any group discounts offered on premiums, such as AAA, unions, chambers of commerce or other groups
— Fifty-three percent said they were not concerned that the state will go back to the pervious rate-setting system
— Forty-five percent said they were undecided as to whether the new system was working better than the previous one
— Eighty-four percent said they have an agent who services their auto and other insurance needs