Massachusetts Auto Insurance Reform

This post is not Jeep related at all.

If you happen to live in Massachusetts, you have probably seen ads denouncing Mitt Romney’s automobile insurance reforms. These ads are just a bunch of hooey.

While the system may work for The Massachusetts Coalition for Affordable Auto Insurance, who happens to be operated by the same companies that reap the benefits of the suffocating state regulations, the system does not work for the average consumer. Maybe Mitt Romney’s plans for reforms aren’t the best, I don’t think that they are. I think that the best course of action is to open the marketplace with limited regulations. Corporations such as Progressive and Geico should be allowed to enter the market and create a little competition. Lord knows, that those of us, who are paying for auto insurance in Massachusetts would greatly appreciate a little competition.

The ads are being paid for by the The Massachusetts Coalition for Affordable Auto Insurance. Who is backing The Massachusetts Coalition for Affordable Auto Insurance? Well the insurers who would benefit the least from added competition. They have started playing ads, depicting drivers in New Jersey who have had to pay more since insurance reforms were instituted in that state.

Three years ago, New Jersey drivers could not purchase auto insurance—at any price. An overregulated insurance market had created a detrimental environment, causing major insurers to flee the marketplace and leaving consumers defenseless without the NJ car insurance they needed.

But in June 2003, state legislators affiliated with both political parties enacted reform legislation to overhaul the entire NJ car insurance marketplace. As a result, insurance companies are now reinvesting in the state and growing their businesses, and consumers have the tools they need to make informed choices and get affordable car insurance—putting them in the driver’s seat.

But from what I can tell, drivers in New Jersey are actually 100% better than they were three years ago. How can I make this statement? Well, simply put, three years ago drivers could not obtain car insurance due to the heavy handed state government regulation of the industry. This is the path down which we are headed currently in Massachusetts. Consumers can only purchase insurance through agents, not directly like with GEICO or Progressive, which in turn raises our rates as the middle man always needs their cut.

After the reforms, auto insurance companies came back to New Jersey, and started competing with each other to earn new business. From what I know of capitalism, when companies compete the consumer wins. Massachusetts needs auto insurance reform and needs it desperately, or auto insurance rates will continue to rise and more and more people will continue to flee Massachusetts.
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