Why are there so few car insurance companies in Massachusetts?
Sunday, August 17th, 2008 at
2:47 pm
Brittany B asked:
Allstate, Statefarm, and independant all don’t offer car insurance in Massachusetts. Does someone know why this is?
Allstate, Statefarm, and independant all don’t offer car insurance in Massachusetts. Does someone know why this is?
Tagged with: Car Companies • Insurance Massachusetts • Statefarm
Filed under: Car Insurance
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‘Cause people from Massachusetts are such amazingly good drivers that they couldn’t possibly need car insurance.
Because of all the rules MA puts car insurance companies under. It sucks, we cant get any of the good, competitive companies in this state, because the state’s rules dont allow these companies to offer the same competitive rates they can in other states. Its simply not worth it to them. I heard, though, due to some changes made this past year, more companies were going to start coming in to drive costs down…our insurance costs are a JOKE to the rest of the country…we pay SO MUCH
Because they can’t make any money — the losses are too high. This is a result of Massachusetts law: if you hit someone, it’s your fault, no matter what the other guy did: run a stop sign, make an illegal turn, whatever. This turns Massachusetts driving into a statewide game of Chicken — and the results are exactly what you would expect.
Look how small your state is. I live in Texas and I swear there seems to be a freaking growth spurt of em down here.
Have you tried going to the Internet and checking for web based insurance company’s? For the most part there cheap and easy to get with.
Caution dint use E-Surance they are expensive as hell.
Mass is a no fault state, and they limit the insurance carriers to certain ones that agree to the rules and regulations of that state. Most of the major insurance companies are not willing to change everything about their business practices to serve that market, especially when they can not make a profit.
In most areas, the party that causes the damage is responsible for the costs of repair. With no fault, each party has to repair their own vehicle, no matter what the cause of the accident. Someone with a beater car that they paid a few hundred dollars for can slam into a $45,000 luxury vehicle, and not have to pay for the damage. All he can lose is his old car. This explains a lot of the driving you see in Mass.
Mass has other strange rules also. You can not insure a car unless it is registered. When you purchase a car, you have to get a form from your insurance company, and take that to the dealer or to the registry, and get your plates. Then you can go and pick up your new car! Just about anywhere else you can get tags (either paper or permanent) from the dealer and drive the car home when you buy it!
There are currently at least 3 companies I know of that offer auto insurance in MA – Vermont Mutual, National Grange Mutual (NGM) and Commerce.
The reason the big companies are not there is the insurance laws. First it is a no-fault (PIP) state – which has to do with medical bills only, not who is at fault in the accident – the rates are set by the State most companies don’t like this. So, if an insurance company writes there, they have to charge set rates, not rates based on their loss experience. Also, once they write there, they have a very difficult time leaving.
But, the laws have just changed allowing a little competition on the rates. So, I know that Progressive is looking to write auto insurance there (they are currently in the approval process with the state) I think GEICO is too – at least that is what our Progressive rep told us because they are trying to beat them into MA. Once those 2 big guys get in, I’m sure some others will follow.
So, currently, your policy would be the same price no matter who insured you. But, wait a few months start calling, you will likely have other options at different prices.
Sue is correct. However, MA currently has 17 insurance companies. Some of the larger ones are Liberty Mutual, Commerce, Metropolitan, Amica and Hanover. Liberty Mutual is one of the largest insurance companies worldwide with over 900 offices and 40,000 employees.
Alot of the insurance companies pulled out when they could no longer afford to insure the involuntary market, people with bad driving records, numerous losses and fraudulent claims. The premiums paid by these folks were insignificant compared to what the insurance companies were paying out in claims.
Starting April 1, 2008 Massachusetts is moving to a managed competition system. This is an attempt by the Massachusetts Division of Insurance to entice national insurance companies to do business here. Rather than the state set rate, companies will be able to charge what they want for the different risks they insure.
Probably because there are so few in South Carolina. South Carolina passed a law that if you had a drivers license and walked into an insurance agency, the insurance agency had to sell you liability insurance. So, what happened? 90% of the companies stopped selling liability insurance (don’t want to insure the high risk drivers).
Most people do not realize that most insurance companies do not like mandatory auto insurance laws (STATE FARM)
Type the following into the yahoo search engine 715 Insurers Quietly Oppose Mandatory Auto Insurance
I remember many years ago (late ’70s) when I was applying to M.I.T., the material they sent me said that MA had the highest rate of car theft in the nation. I don’t know if that’s still the case after more than 25 years, but if so, that could cause there to be few insurance companies there.
You’ll want to research this some more….
Have a nice day.