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New Massachusetts Insurers Avoid High Risk Drivers

Boston and all Massachusetts drivers will continue to see managed auto insurance competition in the state. The Massachusetts Supreme Judicial Court ruled in favor of the Massachusetts Division of Insurance’s decision to temporarily exempt auto insurance companies that are new to the Bay State from having to cover high-risk motorists. The Massachusetts Division of Insurance recently allowed managed competition as a way to allow auto insurer companies to compete for good drivers, giving consumer more choices than ever before. The argument is that competition results in better rates for better drivers across the Commonwealth of Massachusetts, and the Law Office of Neil Burns wants to inform Massachusetts residents that they should now compare auto insurance rates before buying or renewing their auto insurance policy.


The Supreme Judicial Court’s ruling was the result of a 2008 lawsuit filed by Arbella Mutual Insurance. That lawsuit challenged national insurance companies that are new to the Massachusetts insurance market because they did not have to cover high-risk drivers for two years. Arbella argued that exemption put Massachusetts Arbella at a disadvantage; they were required to insure high-risk motorists and split the losses, but new companies were not. The court ruled that although the new companies did not bear losses when insuring poor drivers, they contributed to the administrative costs for the Massachusetts Automobile Insurance Plan. The MAIP provides motor vehicle insurance for high-risk drivers. In effect, the Court said that that was good enough to allow the exemption to stand.
 
He MAIP’s goal was to attract new insuracne companiesers to the market. According to Massachusetts Division of Insurance, since the change, eleven companies have entered the market.
 
When you are ready to buy insurance, try comparing policies, and be certain to look at underinsurance coverage, which is critical in a state where most policyholders have minimal policies.