Massachusetts Auto Insurance Premiums Record Largest Drop in the Nation, According to National Association of Insurance Commissioners
Massachusetts saw $133.80 average premium decrease following Patrick-Murray Administration's introduction of managed competition
BOSTON – January 18, 2012 – A report published by the National Association of Insurance Commissioners found Massachusetts personal auto insurance premiums decreased by 12.7 percent between 2007 and 2009, the time period when the Patrick-Murray Administration's Division of Insurance was implementing managed competition in the marketplace.
The report found the average premium from the end of 2007 to the end of 2009 fell from $1,056.91 to $923.11, a $133.80 decrease. Over the same time period, the national average premium decreased by 1.4 percent. Massachusetts' 12.7 percent decrease is the largest drop in the nation over the time period.
Managed competition started in April 2008, and opened up the marketplace to allow insurance companies to set their own rates and compete for a customer's business. Since its inception, managed competition has attracted 13 new companies into Massachusetts, in addition to the 19 that were in place under the old system. Three of the four largest carriers in the country, GEICO, Progressive and Allstate, have all entered Massachusetts since 2008.
"Managed competition helped Massachusetts drivers see premiums drop at a higher rate than the rest of a country, a benefit we expected to be part of this reform," said Joseph G. Murphy, the Commissioner of Insurance. "Consumers have a larger choice of company, coverage and cost under this system, and shopping around for auto insurance can maximize those benefits."
The report on private passenger automobile insurance was created by the National Association of Insurance Commissioners, reflecting the increase attention to auto insurance rates across the country. The entire report can be found at the NAIC website.
The Massachusetts Division of Insurance (www.mass.gov/doi) is an agency within the Patrick-Murray Administration's Office of Consumer Affairs and Business Regulation. Follow the Office at www.mass.gov/consumer, its Consumer Connections Blog and at its Twitter feed, @Mass_Consumer.