More than a million Massachusetts drivers will see their auto insurance increase between 6 and 9 percent this year with premiums rising at the fastest pace in more than five years.
According to the Boston Globe, insurance companies and industry officials blame two factors that lead to more accidents and higher payouts from insurance companies: Falling gas prices and an improving economy.
The low prices at the pump and an active economy that are generally beneficial for Massachusetts drivers are resulting in negative consequences. Rate spikes from insurance companies are beginning to pass the increased costs of accident payouts onto drivers.
Rates are also soaring due to rising healthcare costs for car crash victims and the fact that newer cars come equipped with sophisticated technology that is quite expensive to repair.
Carmen of Waltham recently told WBZ-TV, “The increase on the policies has been unbelievable,” Carmen says she is a good driver with no points on her license, but she still saw a big jump in her premium.
“It’s a rip-off,” she added.
Traffic fatalities were up 7.7 percent last year, mostly due to distracted drivers. Texting is often the top form of communication for millennials and even though texting and driving was made illegal by MA law in 2010, there is still a significant increase of texting while driving tickets in Massachusetts.
Nonetheless, insurance companies feel their rising rates reflect the cost of insuring a car in Massachusetts.
Rich Johnson, a spokesman for USAA, told the Boston Globe, “Since last year, the entire auto insurance industry has seen a significant increase of auto claims frequency and severity,” Johnson said in an e-mail. “As these trends continue, our overall auto insurance rates must be adjusted to reflect the future projected costs of our members’ claims.”
Arbella Insurance Group of Quincy and Ohio-based Progressive Corp. have not raised rates so far this year.
However, for most Massachusetts drivers be prepared to see their annual premium go up, even without any accidents or moving violations.
August 1st, 2016 | Posted in Blog