Special insurance section: Urban drivers could be in a jam
After years of seeing his auto insurance policies decrease, Chris Haskins will pay at least $50 more on two auto policies this year.
The 36-year-old Brockton resident pays thousands each year to insure two vehicles: his Nissan truck and a tow truck that he uses for work.
“It’s like everything else that’s going through the roof – fuel, insurance,” Haskins said. “It’s hard to keep a working man alive.”
He is among the urban drivers who are seeing their auto insurance rates go up after Massachusetts loosened the regulations on auto insurance rates as of April 1.
Massachusetts had been the last state in the country where regulators set a standard set of insurance rates for all insurers.
Insurance Commissioner Nonnie Burnes said the new rate-setting system was designed, in part, to ensure fairness between urban and suburban drivers.
“We designed it to make sure that good drivers, wherever they are ... are going to get lower rates,” Burnes said.
Burnes said she doesn’t expect the new managed competition system will cause prices to spike among city drivers, although premiums will continue to be more expensive in urban areas.
“There still may be a disparity between the urban and the suburban driver because the claims experience is larger in the urban areas,” Burnes said. “(But) even if you are in a high claims territory, you have the opportunity to have your rate lower than the standard rate. ... The good drivers in urban areas should see significant reductions, just the same as the suburban good drivers.”
But according to a recent report by the consumer advocate Massachusetts Public Interest Research Group, many good drivers under the new system will be hit with rate increases and many bad drivers will see their rates go down – based on factors having nothing to do with their driving records.
“Not all good drivers are going to win,” said Deirdre Cummings, legislative director of MassPIRG. “The rates are set more now based on the things that make up who you are versus how well you drive.”
Current rate factors include discounts for drivers who have a homeowners’ insurance policy, are a good student, have multiple vehicles or drive a hybrid vehicle, among other discounts, Cummings said. In urban communities, drivers who don’t meet these criteria may end up paying more for auto insurance, Cummings said.
For example, renters with spotless driving records in Brockton could end up having to pay more for their auto insurance than insured homeowners with worse driving records, she said.
Insurance agents who serve urban drivers say the changes have brought about more confusion.
“The savings are really not as great as it’s being portrayed,” said Susan Hardy, an agent for the J. Arico Insurance Agency Inc. in Brockton.
“It’s a mess,” said Mark Salvador, agent at Salvador & Co. Insurance Agency in Bridgewater.
Salvador, whose clients include Brockton drivers, said the changes have made it harder for insurance agents to give people accurate rate quotes.
“They should have never fixed something that was never broken, because the rates had been going down every year,” Salvador said.
GateHouse News Service staff reporter Jon Chesto contributed to this story.
Maria Papadopoulos may be reached at email@example.com.