Editorial: Reform draws Geico to state
For years, it's been hard to miss Geico's clever gecko commercials on TV in Massachusetts - and impossible to buy its product. Geico and other national auto insurance companies, convinced the state's heavy-handed price and coverage regulations made it too hard to offer discount policies, stayed out of Massachusetts. That left the market to a handful of local companies whose knowledge of the state allowed them to thrive, and whose political clout kept the regulations in place.
But a year ago, state Insurance Commissioner Nonnie Burnes changed the rules, ushering in "managed competition" in auto insurance. Regulations were relaxed, giving insurers the option of offering a wide range of discounts. The new system can be confusing for consumers, who must now shop around to get the best deals on car insurance instead of assuming every company must charge the same amount. But for those who do, the savings can be considerable.
Competition is good for consumers, and apparently for insurance companies as well, especially national companies that use Internet marketing instead of paying a local sales force. Progressive, one of the nation's largest car insurers, jumped into the Massachusetts market last year. Now Geico, owned by Warren Buffett's Berkshire Hathaway group, has decided the water is fine. Pending Burnes' approval, the gecko will jump in this spring.
Gov. Deval Patrick has kept a distance from his insurance commissioner, but this is one reform for which he should take a bow.
The MetroWest Daily News