Monday, November 19, 2007

Managed Car Insurance...

Today's the day auto insurers propose new rates for car insurance in MA. MA is the only state which state regulators set the auto insurance rates. This article in the Boston Herald discusses the new proposal. So today insurance makers will show state regulators new proposed rates. These rates if accepted will go into effect April of 2008.

The reason for the regulation of car insurance in MA is the fact people are terrible drivers. About 30 years ago the state attempted to have a free market car insurance, but rates tripled. Hence the current system in place is one which manages risk for all drivers by making insurance affordable. Basically it penalizes all "safe" drivers.

So should I support this new car insurance? Well when we lived in CA, we paid a premium being under 25 with new cars although we were good drivers. However since moving to MA, DH does not have the best record. So honestly this managed system of car insurance benefits us a lot. After DH's accidents our insurance only went up $100/year. Not to say we weren't paying a lot for liability insurance about $2k/year for 2 cars and 2 drivers.

However, I cringe when I think what our rates might be if we were to go to a competetive rate system. I think we're personally better off under the current system and so are most MA drivers. Everyone we know has a lot of damage to their cars, even supposedly good drivers. Friends who have moved from elsewhere and never had accidents before, claims that they've had tons of accidents/damage to their cars since coming to MA.

So will this system really work? Can a truly free market system work for car insurance in MA?


Anonymous said...

Why is your husband such a bad driver? This is a safety issue not just a financial issue? How about suggesting that he take some driving lessons?

Living Almost Large said...

Because he's so overly cautious. People ride with him cringe about how safe he is he's more likely to cause an accident. For instance, he got into accidents because he's so worried about other drivers he has trouble merging. He causes accidents because he thinks "oh it's too risky" even with the right of way.

Nothing will change that. I don't get why he's so nervous. But this hesistation caused 2 accidents.

frugal zeitgeist said...

I feel for your husband. I'm a very tentative driver and that makes me exceedingly dangerous on the road.