Thousands won’t get auto insurance renewed under new system, says Hart

By 
Michael Norton, State House News Service
Mar. 26, 2009

Saying thousands of mostly urban residents face non-renewal of auto insurance policies on April 1, Senator Jack Hart has proposed a six-month extension of the deadline in an attempt to address the issue.

Hart told the News Service Tuesday that he believes insurers, during the transition from regulated rates to managed competition, are “cherry-picking” policyholders and leaving by the wayside many urban drivers, including minorities and low-income drivers.

Unable to forge a solution with state insurance regulators, Hart filed an amendment to a bill codifying an appeals board for drivers facing accident-related surcharges that would extend the April 1 renewal date, which marks the one-year anniversary of the managed competition system.

The Senate recessed its session to consider the Hart amendment, before Hart temporarily put the appeals board bill on ice and the Senate abruptly adjourned.

After the session, Hart said Patrick administration officials had offered “no assistance” in addressing the problems facing his constituents, said he hopes his amendment will force parties to the table.
“I’m left to take action any way that I can to try and remedy this catastrophe in the inner cities around Massachusetts,” he said. “None of these insurance companies want to insure inner city drivers.”
In response to Hart’s claims, the Patrick administration said everyone will continue to have access to insurance.

“High-risk drivers live all over the Commonwealth, in every community, and they will all continue to have access to auto insurance,” Kofi Jones, spokeswoman for Housing and Economic Development Secretary Greg Bialecki, said in a statement. “Drivers can shop for new insurance by working with their current agent and using the Massachusetts Auto Insurance Program, or they can shop for new insurance through a different agent or through their own research in the competitive marketplace. No one, anywhere in Massachusetts, will lose the right to auto insurance as we create an assigned risk plan that is equitable and fair for everyone.”

Hart said that as many as 12,000 drivers per month could receive non-renewal notices from their insurers.

Attorney General Martha Coakley’s office is empowered to look out for consumers on auto insurance issues.

“With the deregulation of the automobile insurance industry in Massachusetts, we have been and continue to be concerned about the collateral consequences of many of the changes the insurance commissioner is introducing in Massachusetts,”

Coakley said in a statement Tuesday. “We will continue to monitor changes in the law to ensure that the rights of consumers of insurance product are protected.”

Hart said constituents had already received non-renewal notices and asserted insurers are dropping drivers “because they can” under the new system, which the Patrick administration credits for attracting more insurers to the market here and giving consumers more choices to shop around for the most advantageous premium rates. The Division of Insurance estimated last year that “responsible drivers” could save at least 10 percent on their insurance premiums.

Before the administration agreed to forge ahead with managed competition, skeptics said the system would benefit suburban drivers with cleaner driving records and hurt urban drivers, especially those with driving infractions.

Hart said he realizes managed competition is popular with many, but that he feels a duty to represent his constituents. “I know some people aren’t going to be happy with me,” he said.
Financial Services Committee Co-Chairman Sen.

Stephen Buoniconti (D-Springfield) said after Tuesday’s session that the Hart amendment addressed “technical issues” but could create an issue of “great significance” to insurers.

Buoniconti declined to discuss the matter further.