Massachusetts Attorney General Maura Healey’s office has called on the Massachusetts Division of Insurance (DOI) to direct all auto insurance companies doing business in the state to lower premiums during the COVID-19 pandemic.
In a letter sent Monday to Massachusetts Insurance Commissioner Gary Anderson, the AG’s Office stated it has observed a decrease in automobile travel and accidents in Massachusetts in the wake of the pandemic and called for insurance premiums to be reduced until the decrease in driving ends.
“People all across the state are staying home to reduce the spread of COVID-19,” Healey said in a press release issued by her office. “As a result, there are fewer drivers on the road, fewer car accidents, and lower risk involved, so people should be paying less.”
In the letter, the AG’s Office stated it has observed a reduction in travel in every county throughout the state as compared to the previous year. While the letter explained data are not yet available regarding any reduction in Massachusetts automobile accidents, it pointed to an analysis for California that indicated a 60% reduction in driving has resulted in a 50% reduction in accidents there.
In fact, California Insurance Commissioner Ricardo Lara on Monday ordered insurance companies to return insurance premiums to consumers and businesses and provide financial relief during the COVID-19 emergency, Insurance Journal previously reported.
The commissioner’s bulletin covers premiums paid for at least the months of March and April — including May if “shelter in place” restrictions continue — in at least six different insurance lines: private passenger automobile, commercial automobile; workers’ compensation; commercial multi-peril; commercial liability; medical malpractice; and any other insurance line where the risk of loss has fallen substantially as a result of the COVID-19 pandemic.
In Massachusetts, the AG’s Office is requesting that DOI immediately send a notice to every insurance company writing personal automobile insurance in the state. It is asking that the notice require a reduction in premiums for all personal auto insurance coverages other than comprehensive, effective March 15 until the reduction in driving ends. The state will continue to monitor state and academic reports to determine when the decrease in driving ends, according to the AG’s Office.
“Should a company object to this reduction, you should require the company to respond within seven days informing you of the company’s objection, and then hold an expedited hearing to determine an appropriate premium,” the letter from the AG’s Office instructed DOI.
Many insurance companies doing business in Massachusetts have already lowered premiums or offered rebates due to reduced risk as a result of the COVID-19 pandemic, with MAPFRE and Safety Insurance as two recent examples.
Massachusetts DOI has been in discussion with a number of carriers for several weeks that are developing programs to assist consumers with premium relief and additional coverage options, and DOI has been encouraging property and casualty insurers to consider making filings that provide temporary relief to insureds during this emergency, according to a DOI spokesperson.
As a result of those conversations, carriers representing 90% of the private passenger auto insurance market have filed or identified that they will file to issue refunds or premium credits to drivers, the spokesperson said, adding that DOI is reviewing these carrier filings on an expedited basis.
“At a time when many are struggling financially, we should do everything we can to cut costs for families,” Healey said in the release.
Insurance Journal has compiled a list of auto insurers offering $8-$10 billion in discounts in coronavirus relief efforts. For related articles, check out Insurance Journal’s complete coronavirus coverage.
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