MASSACHUSETTS HAS A PROBLEM

Bay State drivers currently pay some of the highest auto insurance rates in the country. As a state, we are saddled with an anemic, punitive insurance system that is sapped of competition and gamed to reward the worst drivers on the road. This system is antiquated and needlessly complex.

It is unfair to the 64 percent of local drivers with clean driving records. It is responsible for leaving the Commonwealth with only 19 insurers when consumers in each of our neighboring states have a choice of over 100 insurers. Our auto insurance system is failing.

It is in desperate need of reform.

Last year, I assembled a non-partisan task force to find the best solutions.  Our common goal was to reduce rates and provide more options by creating a flexible market that attracts more insurers. 

This week, I unveiled legislation based on the task force’s recommendations.  It reaches our goal in a fair and equitable manner.

The bill is based on two key principles: personal responsibility and choice.

Among other things, this legislation rewards safe drivers.  It will immediately benefit those drivers with a clean driving history by providing a minimum of at least a five percent rate rollback. 

That represents $150 million in consumer savings up front.

Our plan allows insurers to price competitively by offering further premium reductions to good drivers wherever they live.  Massachusetts consumers would have more ability to shop their good driving records around. 

Our plan also retains a subsidy for those urban centers with the highest claim levels.  People shouldn’t be punished for where they choose to live. 

At the same time, people shouldn’t be asked to subsidize poor drivers.  Inexperienced drivers without clean records cause accidents at up to four times the rate of experienced drivers. 

We are accounting for this problem by removing a “highest in the nation” subsidy that has been provided to inexperienced drivers for years.  It’s not fair for good, experienced drivers to shoulder this cost burden. 

Bad drivers need to take personal responsibility — including financial responsibility — for their actions behind the wheel 

If you want a good example of how this new system would work, look at New Jersey.  A few years ago, many Garden State drivers had serious difficulty finding any insurer at all.  The leadership in that state finally responded by putting a reform program in place which allows insurers to account for driver safety records and the local marketplace. 

Two years later, drivers in New Jersey have seen $340 million in savings from insurer rate cuts or special dividends. 

Finally, our new reform plan strengthens the current crackdown on insurance fraud and excessive personal injury claims.   

Every year, $1.9 billion is paid out annually in local injury claims.  We can help lower insurance costs for everyone by ensuring that those dollars are only paying for necessary treatment of real injuries.   

It’s time for Massachusetts to pass common sense auto insurance reform.  Let’s follow the lead of every other state in the country, and provide real choice and rate relief for those who deserve it most — good drivers who respect the rules of the road.