Following the end of the state-set auto insurance rates in Massachusetts three years ago, there have been over a dozen new insurers that have rushed in to take their piece of that sector. However, the largest auto insurer in the country, State Farm Mutual Automobile Insurance Co., has decided that it will be remaining outside of the state.
Other insurers that have made their way in include Allstate, Geico, and Progressive. It’s believed that a fourteenth new auto insurer, Sun Prairie, Wisconsin-based General Casualty, will soon be joining that market.
Without State Farm, the auto insurance market in Massachusetts is lacking a firm that is large enough to take a sizeable enough chunk out of the market to cause premiums to drop. Across the country, that insurer provides coverage for one out of every 5 cars.
That said, State Farm has not excluded any thoughts of ever entering the market. They claim that they simply have yet to decide whether or not the potential profits from that state will be worth moving into it.
State Farm, unlike many of its competitors such as Geico and Progressive – which typically serve their policyholders through call centers and websites – provides its customers with service through its local agent network. If it were to move into Massachusetts, it would need to hire a large new force of local agents.
A spokesperson for the company explained that the company has many factors that it has to consider before it will be able to join a new market, such as pricing, rates, the competition that is already established, and the overall environment for regulations and statutes.