A large number of insurance providers in the state of Massachusetts are increasing the cost of their auto insurance policies in order to make up for the increase in car related costs and medical treatments. Most insurance providers also say that they are increasing the rates on their policies since they have not made significant profits since the year 2008 when the rates dropped. As a result of this, most of them have neither been able to gain a good market share or thwart competition.
One of the insurance providers, Quincy Mutual, which raised the auto insurance premiums by 7.5 percent in April after a 5.6 percent raise the year before, said that they had to take this measure to cover costs after reducing the premiums by 10 percent in the year 2008. On the whole, the rate of auto insurance premiums in this company is 3.3 percent greater than what it was in 2008 which is when the premiums were deregulated due to increase in competition.
Kevin Meskell, the executive vice president of Quincy Mutual, said that the nature of the business they are involved in does necessitate an increase in the premiums. He said that there are a lot of auto accidents that happen each year and the cost of availing treatment for the injuries sustained is not decreasing.
On the whole, almost all the leading auto insurance providers in the state have increased their auto insurance premiums by at an average of 4.3 percent till date starting January 2012. According to the data collated by the Massachusetts Association of Insurance Agents, the average rate of increase was 4.5 percent in 2011 and this was more than the inflation. The reports from the Labor Department of the United States state that the inflation in and around Boston last year rose by 2.7 percent.
The auto insurance premiums may continue to increase this year since insurance providers increase them more than once each year.