Insurance rates in Massachusetts are high because we have the highest accident rate in the nation.
There are real ways to reduce that figure, including increasing seat-belt use, reducing drunk driving, improving roads, re-engineering intersections, and — God forbid — encouraging use of public transportation rather than jacking up fares. The legislature’s current plan to raise the minimum driving age won’t alter the fact that, at some point, everybody must go through a “new driver” learning curve. More helpful would be expanding services like The Ride that help the elderly get around without taking the wheel.
If the state does reduce accidents, our current auto-insurance system will do a much better job of passing along those savings to customers. How do we know? Because we just saw it happen.
A decline in the number of accidents, along with a drop in the cost of repairs, led to a $237 million savings for the insurance companies a year ago, thanks to lower claim payouts.
To reflect the lower costs, Romney’s commissioner of insurance dropped the rates by 8.7 percent this year. Those rates probably should have been lowered even more: Attorney General Tom Reilly, who has the authority to challenge the administration’s rates, calculated that the cut should have been at 18 percent.
The auto-insurance industry, by contrast, recommended a rate reduction of 0.1 percent. No wonder nobody trusts insurance companies.
The current system is less than perfect. There is no doubt about that. Reilly, now running for governor, has spoken in the past about ways it could be fixed, such as by spreading the expense incurred from some of the highest-risk customers more evenly among insurers. He should have stood up for customers and challenged Romney’s rate change. Why Reilly let Romney get away with trying to murder Massachusetts drivers with punishing rates is a question his Democratic challengers, Chris Gabrieli and Deval Patrick, should hit him over the head with. Reilly still has a chance to tackle Romney. And Gabrieli and Patrick should lay out their owns plans.
That would make for a much more enlightening debate than the sorry one the insurance companies are now inflicting on us.
