Mass. Auto Insurance Reform Continues

Boston, MassachusettsLegislation recently signed into law by the governor of Massachusetts is putting an end to a window that temporarily provided auto insurance companies new to the state with a two-year exemption from having to participate in the residual market. Not having to participate in the residual market was a benefit for insurers, as the market is reserved as a last resort for drivers who are considered very risky to cover and can’t obtain a policy elsewhere.

Before 2008, the Bay State’s auto insurance market was heavily regulated by the state government. The National Association of Insurance Commissioners ranked Massachusetts as having one of the highest average auto insurance expenditures in the nation in 2007.

Since reducing the levels of government involvement in the market with the introduction of managed regulation two years ago, 11 new companies have entered the market in the state. The legislation signed by Gov. Deval Patrick may ultimately give consumers even more auto insurance options and drive down insurance rates for consumers entering the residual market.

“Building on our administration’s auto insurance reform, this bill provides more competitive and fair options for Massachusetts drivers,” stated Massachusetts Lt. Gov. Timothy Murray.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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