Lower auto insurance rates on the way [View All]

Auto Insurance Change Promises Lower Rates

For the first time in the memory of most Massachusetts drivers, they will have the opportunity to shop for the lowest auto insurance rates under a plan announced by the state on Monday.

Insurance Commissioner Nonnie Burnes promised lower rates under a plan that she said would transition to managed competition among insurers.

The plan "will benefit consumers with good driving records regardless of where they live," Noones said in a statement released by her office. Drivers will be able to take advantage of competitive rates for policies renewing on or after April 1, 2008.

Under the current system, the insurance commissioner sets the rate and drivers with similar risks pay the same amount.

"Taking gradual steps to introduce competition to the auto insurance market will have a positive impact on consumers across Massachusetts," said Burnes. "Drivers stand to realize benefits from lower rates."

A study group appointed by Gov. Deval Patrick found that some form of competition was essential to keep companies doing business in the state. Since 1990, 35 companies have stopped doing business in Massachusetts.

Under the plan, the state will retain authority to disapprove rates before they become effective, prevent rates that are discriminatory and step in after rates take effect if they appear excessive.

Public hearings will be held before the regulations become effective.