Report criticizes state’s auto insurance system

BOSTON. A report released Thursday slams the state’s new auto insurance system, claiming it will unfairly hike rates for drivers with stellar driving records and cuts rates for those with bad records.

For years, Massachusetts has operated with an auto insurance rate adopted by Division of Insurance.

But on April 1, a new policy — dubbed “managed competition” — goes into effect in which the insurance companies and were meant to provide more options for those seeking insurance by luring more firms to offer their insurance in the Bay State.

The report, prepared by the Massachusetts Public Interest Research Group and the Center for Insurance Research, states that “driving record is no longer the primary rating factor in Massachusetts” and socio-economic factors carry too much weight in determining rates and discounts.

However, Division of Insurance spokeswoman Kim Haberlin said the report is “filled with baseless and misleading arguments.”

She also refuted the notion good drivers would be penalized under the new system, estimating that drivers with good records could receive discounts of at least 10 percent and those with poor driving records will see up to a 10 percent rate increase.

James Harrington, the Massachusetts Insurance Federation’s executive director, also criticized the report’s authors after its release the same week Progressive Insurance of Ohio decided to enter to enter the state’s market.

“Having failed to block the state’s move to managed competition, they have manufactured examples of policy impacts in an attempt to scare consumers on the eve of auto insurance reform,” Harrington said in a statement.