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Improving Auto Insurance Step by Step

Every automobile owner in Massachusetts must have at least one complaint about auto insurance.

Some complaints are, certainly, justified.

For example...you have a minor fender bender, report the accident to your insurance company, and you suddenly find yourself paying more in insurance surcharges over the next three years, or seven years, than the cost of the damages to the car.

And face it, even the slightest bump can easily cost a thousand dollars.

That minor accident, with only $500 to $2000 damage, remains part of your SDIP, Safe Driving Insurance Program, for a long time. Say you started out with a Step 9, the best driving classification possible. (Don't ask me why there isn't one through seven, just start with Step 9.) Each step after that means an increase of about 6 percent on your insurance bill and you lose any safe driving discounts some companies offer.

If you're the driver at fault in that same minor accident, you go right to Step 13. Do not pass go. Go to Step 13. And you stay there for five years. Then you can start down again, to Step 10 in year six if you have had no more accidents, to Step 9 in the year seven.

We, and by we I mean those of us on an Insurance Subcommittee in the House and Insurance Commissioner Linda Ruthardt's office, are looking at a couple things to save you money. Basically, we agree that the penalties you pay in added insurance are too high. Especially for people with clean driving records.

Maybe you could "bank" years of safe driving, earning a SDIP 6 or SDIP 7, which don't exist now. Those ratings would save you money, but if you have a minor accident you could draw on that account, on those years of safe driving, and avoid the surcharges incurred after an accident.

Or, set a level, say $700 or $2000, and exclude damage less than that from the SDIP. Low thresholds in fact encourage drivers not to report damage and, perhaps, not repair damage that might be a safety hazard in itself.

It's a start. But there's probably more we can do.

In a brainstorming session recently, subcommittee members came up with a variety of other ideas to "age" the penalties and points. Some violations--no fault violations, when a tree falls on your car, for example--might be exempted from the SDIP. Fewer years of penalties in the steps.

And, at the very least, we should change the rule that gives you points for letting your inspection sticker expire.

Changes, however, are not only up to the legislature. They're up to the Insurance Commissioner who sets rates every December for the following year. (Another thing that should be changed, so that next year's rates are known earlier in the year, to give motorists a chance to shop around.) And up to the Attorney General's Office, and up to the insurance industry's Automobile Insurers Bureau, and the State Rating Bureau.

At least we're talking about the problem. And, after two terms, four years, on the Joint Committee on Insurance, I know there are no easy solutions to any of your complaints. But, mail me your ideas and I'll pass them along to the Committee and Insurance Chair Nancy Flavin of Easthampton.

Meanwhile, I'll be at an international symposium on automobile insurance next month. As one of five legislators from the United States invited to attend, I'll find out how other countries and states are solving their auto insurance problems.

The conference is in Quebec City, Quebec, which has had what is called a "perfect" no fault system for 20 years. They've done away with the tort system, and all Quebec drivers, passengers, and pedestrians are indemnified regardless of their conduct. It's a "no fault" system at the purest, and I'm told no one in the Province wants to return to a tort system.

And, premiums have declined. Average premium is $164 per year.

I'd like that!


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