December 14, 2000
FOR IMMEDIATE RELEASE
CONTACT: CAROL LANIGAN, 573-7308 OR
CHRISTOPHER GOETCHEUS
(617) 521-7333


DIVISION OF INSURANCE ANNOUNCES CUT IN PERSONAL AUTO INSURANCE RATE


(BOSTON, MA) The state's Division of Insurance today announced it has approved an -8.3% decrease in the Massachusetts private passenger auto insurance rate for 2001. The rate, effective January 1, 2001, represents an average savings of $78 per insured vehicle and an average annual rate of $862.01.

"This is great news and a well-earned reward for Massachusetts motorists. It proves that improved driving habits can reduce auto insurance costs to consumers," said Jennifer Davis Carey, Director of the Office of Consumer Affairs and Business Regulation.

In announcing the rate reduction, Insurance Commissioner Linda Ruthardt acknowledged that evidence submitted this year supports the decrease in the average rate. "This decision reinforces the fact that the cost of auto insurance is largely driven by our habits behind the wheel."

The decision in the 2001 private passenger auto insurance rate case marks the 5th time in seven years that a reduction in the average rate has resulted. Since 1994, the average rate has been reduced by 24.9%.

Earlier this year, the insurance industry suggested a +2.5% increase in the average rate, which was subsequently amended to a +0.7% increase. The State Rating Bureau recommended a -14.1% decrease in the average rate, which was revised to -12.9%. The -8.3% decision by Commissioner Ruthardt translates into a savings of $294 million in 2001 auto insurance premiums.


SOME CONSUMER FACTS

  • In the next 30 days, insurers may file with the Division of Insurance for permission to charge less than the established rate for 2001. In recent years, insurers have offered voluntary discounts ranging from 2%-to-15% for drivers with SDIP steps 9 and 10. The Division's web site will again be regularly updated as applications are filed and decisions issued.

  • In the coming weeks, insurers may file group discounts with the Division of Insurance. As these discounts are approved they will be posted on the Division's web site at www.mass.gov/doi . Consumers can realize additional savings by qualifying for an approved group. Check with your agent, insurer or employer.

  • In September, a decision was issued on territorial assignments for 2001 and 2002. In that decision, 53 communities moved up one territory, 115 communities moved down one territory and 192 communities remained in the same territory.