On Sept. 27 I testified before the legislative Joint Committee on Financial Services regarding the reform of the automobile insurance industry in Massachusetts. My testimony centered on two important yet rarely discussed issues: relief for good drivers who live in large cities and regulation of discriminatory factors in competitive coverage decisions. With the high cost of gasoline, it is hard enough for middle-class families to afford a car, without the added burden of high auto insurance rates. Like many of you, I am a good driver with no accident history or moving violations.
However, I continue to pay the same insurance premium, though my car depreciates every year and the state- set rate has consistently decreased. The only factor unaccounted is the fact that I live in the second-largest city in Massachusetts. As an experiment, I asked my auto insurance provider to draw up two insurance estimates, one for my current address in Worcester and the other a quarter-mile away in the town of Millbury. The only factual difference was the location; all other information including vehicle, step, etc., was kept the same. In one year alone, I learned that I could be saving almost $550 by living only a half-mile to the south of my home.
The largest disparity between the two estimates dealt with the premiums for bodily injury ($263 in Millbury; $525 in Worcester) and collision ($572 in Millbury; $838 in Worcester). Worcester residents pay more in insurance premiums because more accidents happen in Worcester compared with a neighboring town with a much smaller population.
However, fiscal analysis shows that most accidents do not happen in a driver's own town. Therefore, a Grafton resident who has a car crash while commuting to work in Worcester will see an increase in his or her own coverage, but residents of Worcester also will see an increase in their premiums, because the crash occurred in Worcester.
My other concern centers on the information that insurers in a competitive market would be able to base coverage and rates on. Currently, insurers in the commonwealth base coverage rates solely on a driver's experience, driving record, address and vehicle type. In other states, companies are allowed to base decisions on marital status, home-ownership, education and job status.
I represent a working-class district with many hardworking residents who may not have a degree or own a home, but who are competent and safe drivers. They deserve to have the same rates as a similar driver with a degree and a home. Worcester, which has such a large diverse population (a fact that the city should be proud of), would be adversely affected. Massachusetts has always prided itself on ensuring that consumers are given fair and equitable services, and we must continue to guarantee consumers are protected. The good drivers in Worcester deserve better than what they are receiving in auto insurance. When legislation comes before the House of Representatives, I look forward to working with my colleagues to improve the auto insurance industry to ensure that any reform that I vote in favor of will address the above issues.
However, I continue to pay the same insurance premium, though my car depreciates every year and the state- set rate has consistently decreased. The only factor unaccounted is the fact that I live in the second-largest city in Massachusetts. As an experiment, I asked my auto insurance provider to draw up two insurance estimates, one for my current address in Worcester and the other a quarter-mile away in the town of Millbury. The only factual difference was the location; all other information including vehicle, step, etc., was kept the same. In one year alone, I learned that I could be saving almost $550 by living only a half-mile to the south of my home.
The largest disparity between the two estimates dealt with the premiums for bodily injury ($263 in Millbury; $525 in Worcester) and collision ($572 in Millbury; $838 in Worcester). Worcester residents pay more in insurance premiums because more accidents happen in Worcester compared with a neighboring town with a much smaller population.
However, fiscal analysis shows that most accidents do not happen in a driver's own town. Therefore, a Grafton resident who has a car crash while commuting to work in Worcester will see an increase in his or her own coverage, but residents of Worcester also will see an increase in their premiums, because the crash occurred in Worcester.
My other concern centers on the information that insurers in a competitive market would be able to base coverage and rates on. Currently, insurers in the commonwealth base coverage rates solely on a driver's experience, driving record, address and vehicle type. In other states, companies are allowed to base decisions on marital status, home-ownership, education and job status.
I represent a working-class district with many hardworking residents who may not have a degree or own a home, but who are competent and safe drivers. They deserve to have the same rates as a similar driver with a degree and a home. Worcester, which has such a large diverse population (a fact that the city should be proud of), would be adversely affected. Massachusetts has always prided itself on ensuring that consumers are given fair and equitable services, and we must continue to guarantee consumers are protected. The good drivers in Worcester deserve better than what they are receiving in auto insurance. When legislation comes before the House of Representatives, I look forward to working with my colleagues to improve the auto insurance industry to ensure that any reform that I vote in favor of will address the above issues.
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