As car insurance rates vary significantly in the state of Massachusetts, vehicle owners are advised to do their research and compare policies when shopping for the best-priced and best-featured premiums offered by different companies. The new auto insurance policy in Massachusetts, which dropped the uniform rates prescribed by state regulators for all companies, makes rates vary from insurer to insurer.

On November 20, 2007, Nonnie S. Burnes, Massachusetts Insurance Commissioner, released a new analysis with the information on the five biggest car insurance companies operating across the state - Liberty Mutual, MetLife, Arbella Mutual Insurance of Quincy, Commerce Insurance of Webster, and Safety Insurance of Boston. The analysis, focused mostly on the companies’ best rates, showed a huge disparity in premiums depending on the particular insurer’s policy. For instance, two drivers with the same experience and similar driving records showing that they had a speed violation incident a year ago, can be offered a 5 percent increase on the premium by MetLife & Home of Warwick, R.I., but a 34 percent reduction from Liberty Mutual of Boston. Such discrepancy should encourage good drivers to take their time studying the market, in order to benefit from the current insurers’ competition. In addition, different companies offer a wide variety of different policy benefits, which can be of a particular interest of drivers, too.

With the total amount of 19 insurance companies acting in the state of Massachusetts, the state’s switching to competitive car insurance system is designed to both give existing insurers more flexibility in offering prices and benefits and attract more companies to Massachusetts. This new system seems very promising since many current insurers have started adjusting their policy to reduce the premiums, and, in some cases, significantly. The overall drop in premiums is expected to cover from 70 to 80 percent of all four million cars hitting the roads of Massachusetts. Drivers of about 800,000 - 120,000 vehicles, or 20 to 30 percent of the state’s auto park, should expect their premiums to increase or remain unaltered. The report forecasts that the average premium next year will fall about 7.7 percent, which is less than many analysts had predicted if the rates had continued to be regulated.

The third largest state insurer, Arbella Mutual, promises that its rates will be reduced about 6.2 percent and a number of new policy benefits will be offered to customers next year. In addition, it says that the premium surcharge for an at-fault accident will be waived for those drivers who have not had driving incidents for five consecutive years. Hanover Insurance of Worcester, a smaller insurance company, says that it will reduce the length of time from six to three years for the customers to pay a premium surcharge for moving violation or an at-fault accident. In either case, savings for Massachusetts drivers are expected to be substantial.

Under the new policy, Massachusetts insurers will also offer improved coverage for vehicles’ replacement and repair, as well as a flexible system of discounts, including a 5 percent discount for owners of environmentally-friendly hybrid cars.

Rick Kaler