Study finds that drivers avoid fighting auto insurance surcharges
A new study conducted by the New England Center for Investigative Reporting has found that many Massachusetts drivers are not appealing insurance surcharges associated with accidents and traffic violations. The study draws upon data from the state’s Insurance Board of Appeals. This data suggests that drivers are avoiding appealing insurance surcharges because of the concept that they are unable to win their case. This may not be the case, however, according to the Center for Investigative Reporting.
Despite high success rate, consumers wary of legal battles
The study suggests that drivers have an above 50% success rate when appealing auto insurance surcharges. Furthermore, only 30% of drivers that have appealed these surcharges in the past have been found to be more than 50% at fault in an accident or traffic violation. According to the Massachusetts Insurance Board of Appeals, the number of consumers appealing auto insurance surcharges has dropped by 36% since 2006.
Costs associated with appeals cited as reason behind low rate of appeals
The Massachusetts Insurance Division does not track the reasons why drivers are not appealing the auto insurance surcharges. Some insurance officials speculate that appeals may be an unattractive option for consumers due to the fees associated with a court case. The cost of fighting auto insurance surcharges varies depending upon the nature of the citation issued to a driver. Legal costs can add up quickly for those that are unprepared for litigation and can become overwhelming. For some, the costs associated with appeals may outweigh the potential benefits of winning a legal battle.
Information could promote more transparency in the auto insurance industry
Due to the fact that auto insurance rates tend to spike for drivers in the wake of an accident or traffic violation, auto insurance surcharges may be adding more financial tension to consumers than necessary. Glenn Kaplan, chief of the Attorney General’s Insurance and Financial Services Division, suggests that the information provided by the study is valuable in that it highlights the need for more transparency in the auto insurance industry of Massachusetts.
