ATTORNEY GENERAL MARTHA COAKLEY CAUTIONS CONSUMERS REGARDING DIVISION OF INSURANCE AUTO RATE WEBSITE
Press conference audio included below.
The Attorney General's Office strongly encourages consumers to express feedback about their experiences in seeking to compare auto insurance rates by calling the office's toll-free comment line 1-866-928-8667, or by emailing InsuranceFeedback@state.ma.us.
"Today marks the first time in many years that consumers have had to shop around for the best insurance rates," said Attorney General Martha Coakley. "Without easily accessible and truly comparative information, based on individual drivers and their needs, consumers will find it difficult to make informed decisions. The lack of transparency will impede the goals of competition-lower prices and more options for consumers."
The Attorney General's Office is concerned with several features of the website which it considers to be misleading. Specifically:
- The Reported Sample Premiums are Misleading. The website does not calculate rates for the average consumer. Currently, the website is offering "sample premiums" based on only a limited number of criteria, such as zip code, years licensed, car make and model, miles driven and driving record. These criteria are further limited by only allowing consumers to choose from a small sample of vehicle models, broad ranges of number of years of driving experience, and very limited options for the levels of coverage.
- The Website Does Not Reflect Discounts and Other Factors. The website does not address discounts offered by companies and other factors that are used to raise or lower rates. For example, married couples who share a policy, or a driver with more than one car, cannot obtain a sample premium on the website.
- The Website Does Not Accurately Rank The Insurers In Terms of Value. When consumers obtain sample premiums from the site, they view a list of companies in order of "best to worst" in terms of value. In many cases, the best prices identified on the website are not the best prices from insurers in the real world and present a misleading picture of the competitive landscape.
- The Website Doesn't Disclose That Quoted Policies May Not Be Available. Some of the rates offered on the website are not actually available to all consumers. This point is not made clear on the website. For example, State Farm and USAA will not write insurance for most people in Massachusetts.
Consumers should follow these tips when shopping for insurance under the new system:
- Obtain Quotes from All Insurers. Insurance companies are using new rating factors and handling rates for people differently. Consumers will not know which insurer is the most cost efficient unless they do their own homework. Just because one company gave your friend, coworker or family member a good deal, does not mean they will do the same for you.
- Obtain Multiple Quotes from Each Insurer. Different agents within the same agency offer different quotes and discounts. Accepting the first quote from the first agent you talk to may be a mistake.
- Know What Types of Discounts You Qualify For Under the New System. There may be a variety of factors that qualify you for a discount on your policy: the miles you drive, whether you take public transportation, or organizations you belong to.
- Get Quotes in Writing. Make sure that any quote you receive includes a "coverage selections page" that shows the coverage, limits, and deductibles that you want. Read the coverage selections page carefully to ensure that everything is as you requested and that all information is correct. Immediately point out any mistakes to the insurance agent and/or insurance company and ask for written confirmation of any changes.
- Compare Quotes. When comparing quotes, keep in mind that coverage, limits, deductibles, and discounts have big effects on prices. A small difference in even one of these areas can make a bad quote look like a good one. Be aware that different insurers may not offer exactly the same overall benefits. This can make it somewhat difficult to compare quotes.
For tips about shopping for auto insurance, visit the Auto Insurance section of the Attorney General's website.
Today marks the beginning of the new deregulated auto insurance rate system, which allows auto insurers to set their own auto rates. Previously, auto insurers had their rates fixed and established by the Commissioner of Insurance after a hearing process to determine that rates were sufficient and fair. The Attorney General's role remains the same under the new system as the ratepayer advocate and the office remains committed to fighting for fair competition.
Download and view a chart comparing the results provided by the Division of Insurance website, InsureMASS, with results obtained directly from insurers:
Listen to the press conference audio from April 1, 2008:
- Division of Insurance Website Press Conference (MP3) file size 29MB