State moves to cap auto insurance increases
State Insurance Commissioner Nonnie Burnes is taking steps to limit how much insurers can raise rates under the state’s managed competition plan, but consumer advocates and local insurance agents question whether it’s the right move to ensure drivers save money.
Burnes has moved to cap premium increases at 10 percent for even the state’s worst drivers. The cap was quietly imposed in regulatory bulletins issued earlier this month and takes effect when auto insurance competition begins April 1.
One cap limits premium increases for good drivers. If an insurer wanted to raise premiums 10 percent or more, it would have to get permission from the Division of Insurance through a public hearing.
A second cap restricts what insurers could charge high-risk drivers. In Massachusetts, most of those drivers are funneled into a shared-risk pool operated by Commonwealth Automobile Reinsurers.
Consumer advocates and some insurance agents don’t think the cap is a good idea. Insurance rates have gone down each of the last four years, most recently 11.7 percent on average for good drivers. Lawrence drivers saw a 24 percent decrease on average.
Tags: Auto Insurance, insurance, insurance agent, insurance agents, insurance commissioner, insurer, Premium, premium increases, premiums, risk
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