On April 1st managed competition in the Massachusetts automobile insurance marketplace turned three. This change ended the prior fixed and established system under which the Commonwealth set auto insurance rates. The new system, implemented in 2008, created a marketplace that allows companies to compete for consumers through rates, discounts and benefits. Since the reform began, 13 new companies have entered the Massachusetts market, including three of the four biggest carriers in the United States: Allstate, Progressive and GEICO.
“In three years we have seen managed competition grow into a market that allows consumers wide choices in companies, coverage and cost, where there was almost none before,” said the Massachusetts Commissioner of the Division of Insurance, Joseph G. Murphy. “This new system will continue to grow as more companies enter Massachusetts and carriers continue to aggressively compete for drivers.”
The Division says that managed competition has opened the door to a number of new discounts that can save consumers 10 percent or more and benefits that were previously not available to consumers in Massachusetts. This includes items like accident forgiveness, disappearing collision deductible, emergency lodging and meals benefits, hybrid discounts, loan or lease gap coverage, and coverage of pets.
“For too long Massachusetts consumers had little choice when it came to auto insurance, and no incentive to shop around for better deals,” said Barbara Anthony, the Undersecretary of the Patrick-Murray Administration’s Office of Consumer Affairs and Business Regulation. “Managed competition has given that incentive to shop back to drivers. A few hours of research can be paid back with hundreds of dollars saved on premiums.”
Agents, how has managed competition been for you and your agency? Leave a comment and let us know how you feel.