Massachusetts Attorney General, Martha Coakley, is taking aim at the state’s auto insurers. Coakley claims that the price for commercial coverage is excessive, costing consumers more than $1 billion over the course of seven years.
The Attorney General is urging the state’s Insurance Commissioner, Joseph Murphy, to reduce rates. The notion has received opposition from many auto insurers who argue that the current rates are necessary.
Coakley claims to have received information from the National Association of Insurance Commissioners and the Automobile Insurers Bureau that show consumers are paying too much for coverage. According to her, consumers spent $150 million each year from 2004 to 2010 for coverage. Rate for auto insurance also rose during those years, in some cases by as much as 21%.
“These inflated commercial auto premiums impact virtually every industry in Massachusetts,” argues Coakley. She asserts that the high cost of auto insurance has prohibited out-of-state businesses from investing in Massachusetts, causing residents to potentially lose out on thousands of job opportunities. Small businesses, Coakley says, are under more acute strain as they struggle with the high rates.
Currently, the state’s Insurance Commissioner holds the authority to make changes to commercial automobile insurance rates. Commissioner Murphy is expected to review the rates to determine whether or not they are excessive, but is unlikely to make any changes. State insurers assert that the rates are necessary – indeed, fair – to stay competitive in the market as well as mitigate losses from increased occurrences of fraud.