Auto insurance rates calculations may be changing in Massachusetts

Auto Insurance Rates - Calculations - Money

A new bill has been proposed in the state that will alter the way premiums are calculated for drivers.

A newly proposed bill in Massachusetts has the potential to greatly change the way auto insurance rates are calculated, and the amount people will be paying for their coverage in the state.

The Senate bill is aimed at changing highly influential components used to calculate premiums.

Among the factors that are most defining to auto insurance rates in Massachusetts is a driver’s ZIP code. However, the bill in the Senate is now aimed at reducing the amount of weight that particular factor has in the calculation.

Auto Insurance Rates - Massachusetts Law

The new bill would alter the premiums calculation formula so that no more than 75 percent weight could be given to a driver’s ZIP code and 25 percent weight to the average across the state. This particular model is comparable to the one that is already being used in Connecticut for determining how much someone pays for their policy.

That said, these auto insurance rates calculation changes aren’t without their opponents.

In a report published by WWLP, Jack Dowd from Dowd Insurance Agencies was consulted for his opinion on the changes being proposed by the Senate. He said that there is an important reason that people in different areas of the state will pay different premiums for coverage, even when all other factors are essentially equal. He pointed out that it makes sense that people in South Boston should pay a different rate than those in Longmeadow.

“It’s not always about how you and how you drive. It’s about other people driving too,” explained Dowd. “You can’t control how other people drive and if your car is parked in a certain area that’s where it’s always parked. You’re going to be more likely to get into a fender bender.”

Senator Pavel Payano took the opportunity to describe the importance of the bill, when he spoke at a joint committee on finance. He stated that the auto insurance rates bill is geared toward reducing the financial burden on urban areas, thereby reducing the impact on communities mainly composed of people of color.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.