As everyone prepares to look back at how the year was for them, drivers and consumer advocates also look back at how changes in auto insurance policy affected them. As 2010 draws near, Massachusetts drivers cannot help, but wonder if the deregulated car insurance system really did produce good results for them or if it worked for their disadvantage. Unfortunately, the auto policy deregulation that was initiated back in 2008 seems to have been receiving very harsh criticisms recently and needs to be improved.
Consumer advocate and a consumer watchdog of the insurance system Attorney General Martha Coakley have recently released a report that industry insiders describe as utterly sharp, criticizing both deregulation and the administration of Governor Deval Patrick.
Back in 2008, Governor Deval Patrick backed up a change in the original Massachusetts auto policy system, a new “managed competition” scheme that plans to woo an inflow of new insurance agencies in the state, increasing competition and lessening rates for motorists. Under the original “fix and establish system,” premium rates will be set by the insurance commissioner after a thorough assessment of a number of recommendations and feedback from experts, insurers, and other groups. On the other hand, this “managed competition” system will allow insurance companies to set their own premium rates, which are of course subject to prior review and approval of the commissioner. Deregulation of the auto insurance system promised to cut back rates from consumers and enhance the quality of service provided by insurers. Now that Massachusetts is about to enter its second year under the new auto policy system, various groups are expressing their views about the said car insurance experiment.
Statements released by Coakley office’ present a very negative image of the deregulation, emphasizing negative results and expressing Coakley’s concern that motorists may not end up getting the better rates and improved service quality they deserve.
Meanwhile, a number of local groups remain positive about the deregulation, saying that it can take time for the effects to be felt and that positive results will be felt anytime soon. Massachusetts’s Executive Office of Consumer Affairs and Business Regulation undersecretary, Barbara Anthony, said that she respectfully disagrees with Coakley’s statements, particularly her analysis of prices. While Coakley points out that rates did not go down, Anthony noted that the average premium prices declined by approximately 8.2% in the first year of deregulation.
Experts predict that during the first weeks of 2010, more feedback on the deregulation will come up. Until then, the best thing to do is to wait and see if this new system can deliver the results it promised.