As noted by market analysts, auto insurance cost in Massachusetts would have skyrocketed during recession had it not been for the high level of competition among insurers in the state. The Internet is cited as this year’s most prominent marketing venue for Massachusetts auto insurance providers, with its relatively low cost and high traffic density. Experts say the Worldwide Web allowed easier comparison shopping for consumers, letting them choose among many carriers for the best deals available. They add that newly developed auto insurance rate comparison tools, sponsored by different companies, made shopping faster and easier.
In 2008, the State of Massachusetts loosened its regulations on companies, allowing them to determine their own premium rates. This means that since last year, providers already have freedom to adjust rates as long as they are approved by Massachusetts Division of Insurance. If there were only few companies in the state, consumers would have to bear excessively high costs. But experts say that companies saw lesser regulations as a chance to acquire more clients. They add that competitive pricing became the new “name of the game” for insurers. Massachusetts Consumer Affairs and Business Regulation recorded that consumers saved over $270 million in auto insurance premium since new laws were applied. They add that managed competition gave businesses chance to earn bigger and for consumers opportunity to save more.
Specialists also say that comparing via internet provided consumers with adequate information at the most convenient manner. It has helped motorists meet mandatory auto insurance laws in the state, including the new 20-40-5 rule. According to revised state regulations, the minimum bodily injury coverage per person should be at $20,000. $40,000 is the required coverage for all persons injured in a single accident while $5,000 should be allocated for property damage. An additional $8,000 is required for personal injury protection to cover medical and work loss expenses.
Industry experts note that last year’s changes in government regulation pushed rates down by 6.4% compared to its average three years ago. As of 2006, Massachusetts residents were paying an average of $1,042 for auto insurance rates. Those figures placed the state as the 6th most expensive state for vehicle policyholders.
However, analysts also gave government intervention credit for lower rates this year. Graduated Driver Licensing Program, which decreased teen fatality in crashes by 48%, is one of several government actions to help motorists avoid costs and accidents. Experts encourage motorists to continue shopping around for better rates since the recovering economy and government regulations are on their side.