Bay State drivers are about to enter a new system of managed competition in auto insurance. Steve Aronson, president of Aronson Insurance, answered readers' questions about everything from covering commercial vehicles to shopping for new rates. Here's a transcript of the discussion.
Sam_Good_Driver__Guest_: Will my rates go up or down with the new system?
Steve_Aronson: If you have a good driving record, your rates will most likely go down. If you have accidents and moving violations, it will go up.
Steve_Aronson: Good morning and Welcome. This is Steve Aronson, President of Aronson Insurance in Newton & Needham.
Steve_Aronson: I will be glad to answer your auto insurance questions - starting at 11:00.
suzgee__Guest_: My current auto insurance policy was renewed this past January. Should I be still looking at different companies. Also, does this new system also include commercial vehicles? My husband has a commercial truck and his coverage is up in June. thanks for any info you can pass along
Steve_Aronson: This is a good time to contact your agent. By putting your personal auto, business auto and home insurance with the same agent/company, you will realize some substantial premium savings not previously available. And, there are new coverages available as of Aril 1st that are not on your current policy.
BeantownDan: Steve. I read on Boston.com that drivers of all ages can take driver training to be eligible for discounts from some insurance companies. I'm in my 30's, does this mean I should take Drivers Ed with a bunch of 16 year olds?
Steve_Aronson: Actually, they were referring to Advanced Driver Training or Driver Skills Development Programs as defined by the Registry of Motor Vehicles. The classes teach crash prevention and while they are a great compliment to a new drivers education, they are beneficial to drivers of all ages. (My mother took the "InControl" program in Weymouth and loved it!) As a result, she's a safer driver, AND she'll save between 5 and 10% on her auto insurance this year.
Don__Guest_: If my policy renewed prior to April 1, does it include the new rates? My other vehicle renewed after April 1 and it seems much lower than last year. If this is the case, any way around it?
Steve_Aronson: Even without the new "Managed Competition" system, rates have been going down steadily for the past few years. So, you can sit with your current policy, or, speak with your agent about possibly re-writing your policy now. Beware that there may be substantial penalties for cancelling your current policy. Also, the best savings are gained if you put your auto and home insurance together.
Eld__Guest_: As an agent, I am floored by the state's website. It in no way reflects all of the discounts that our companies offer, so our companies show high rates. I hope our clients don't just leave us based on what they are finding on the state site!
Steve_Aronson: I too am frustrated with the state's webiste. Our clients are finding it very confusing and not at all reflective of the competitiveness of the different insurance companies. I hope they pull it down until it can be made more accurate (very difficult to do). Until then, drivers should call their agent instead.
insagent__Guest_: Steve, isn't it true that if your policy renewed in January and your cancel and re-write your policy with a new company that you may lose money by being short-rated?
Steve_Aronson: Yes - driver need to be aware that cancelling a policy mid-term will usually result in a costly penalty. Many drivers will be well served by waiting until their policy expires. On the other hand - talking to your agent is always a good thing to do.
chins__Guest_: hello Steve. I have a clean driving record; am on a step 9 right now for the last 6 years. Last year, I had a 'no fault' accident (hit and run driver) and my insurance paid up everything, without even a deductible. I still pay about 1200 for insurance. SHould i be shopping around? will my rate be affected by the no fault accident last year? thx.
Steve_Aronson: If you were judged to be not-at-fault, the incident should not affect your rates.
eb__Guest_: Will insurance companies now use socio-economic factors, particulary credit score, education level when determining rates for auto insurance?
Steve_Aronson: The new Managed Competition system in Mass. prevents insurance companies from using socio-economic factors when rating auto insurance. So, things like your credit score will not affect your rate.
good_driver__Guest_: my coverage renewed in december. what do you suggest? there's no way i will wait and pay more in the meantime, and if commerce thinks penalizing me for cancelling is the way to keep me loyal, they've got another thing coming!!
Steve_Aronson: Call your agent. Staying with your current company may or may not make sense. Suggest you put your auto + home insurance with the same agent/company. You will save money. And, many companies are offering new loyalty discounts.
Elaine__Guest_: Is there a web site that we can go to and compare rates?
Steve_Aronson: Not possible. Even the best rating software available to us (agents), it is taking experienced agent 20+ minutes to do an accurate, multi-company quote. Even more, since you can save even more by putting your auto and home insurance together, you need to speak with your agent. They will help explain not only the pricing differences, but the lowest quote might not offer the right coverages for you and your family.
Eire__Guest_: What's the most effective way to shop around on the internet?
Steve_Aronson: Unlike books and CD's, insurance is not easily purchased on the internet. It's much too confusing. You are protecting your car (maybe $25,000 or more), your home (maybe $300,000 or more), your income ($??,000) in case of an accident. Are you prepared to make decisions about protecting your financial future by clicking on an internet button? Not me!
82girl__Guest_: When trying to find the best rate, can I do it online? Can I call a company myself or do I have to go through an agent?
Steve_Aronson: You could call a company directly. You'll get jsut their rate. If you call an agent, most will have multiple companies to offer you. I suggest you find an agent in or near your local community. They will better understand your needs than a 1-800 operator based in Arizona.
eb__Guest_: So let's be clear on credit scores and what you said earlier. You mentioned that consumers should bundle their auto & home insurance together to get savings. Homeowner insurance CAN check your credit report, but auto CAN NOT be checked when setting rates. Isn't this a major CATCH-22 that allows insurance companies to backdoor the policy of using credit reports to set auto rates?
Steve_Aronson: The rating software that we have does not use the home credit score for your auto quote. Even if we know it (because we write the homeowners policy), it does not affect the auto insurance premium.
SaveMeSomeMoney__Guest_: Hi Steve - We are three car family. My wife and I have clean driving records. My 19 year old daugther does have a speeding ticket that she is paying a surcharge on. Would we be wise to shp around? We have been with the same insurance company (Premier) for 20+ years.
Steve_Aronson: Premier (now known as Travelers of Massachusetts) sells insurance only through independent agents. Call your own agent (or, another one if you don't like your agent) and discuss your account with them.
nani__Guest_: hi how can we save with new system
Steve_Aronson: Driver carefully!
Steve_Aronson: Talk to your agent.
Steve_Aronson: Put your auto and home insurance together.
Steve_Aronson: Drive carefully!
Eire__Guest_: You keep assuming we all own homes..what about young people who are trying to pay for college and rent, I bet you'll say...Talk to your agent
Steve_Aronson: When I say "home" insurance, that includes a renter's policy or a condo-unit-owners policy. If you are putting your kids through college, you, like everyone else, needs to protect your personal property from a severe loss, and from a lawsuit. If you are putting yourself through school - that is impressive. Kids in college tend to do more risky things than we parents do. You need to protect yourself. A policy may only cost $100. Call your agent.
Inf__Guest_: What can I do as a city resident to save on my auto insurance? I have as many "safe driver" credits as it is possible to have and still pay more than my cousins who are far worse drivers but live in an allegedly safer neighborhood -- but who have to drive significantly farther to get to work -- putting them at more risk than I am since I only drive 4 miles.
Steve_Aronson: The new system should do a better job of rewarding good drivers and penalizing bad ones.
nani__Guest_: would paying off the car with no lien bring up my insurance payments?
Steve_Aronson: It won't. In fact, if you don't have a lein, and your car is getting odler, you might consider dropping Collision and saving $$$.
Eld__Guest_: I do hope that people understand that if they deal with a direct writer company like Amica, Progressive, Liberty and Geico (if they decide to come here), they are not getting personalized service. They talk to whomever answers the phone. An agent will work one-on-one with a client, whether it be rating, claims, whatever the situation may be.
Steve_Aronson: Amen. How will the direct-writing rep in Arizona help a Mass driver with Registry of Motor Vehicle problems? While not direclty auto insurance - it's one of the many services provided by local agents. Not to mention coaching and sponsoring the local Little League and soccer teams. (sorry for the commercial)
Inf__Guest_: Is auto insurance ever going to be primarily based on how you drive, rather than where you live? I live in the city, drive carefully, bundle my insurance, talk endlessly to my agent about cost cuts, get discounts for AAA and various other memberships, and still pay double what someone who lives in a town 5 miles south of here pays. My unimpressive, fuel efficient, boring car has never been stolen, broken into, or damaged in any way in my driveway. Am I the only one that thinks this is grossly unfair? I am punished for something that *might* happen -- but which hasn't happened in 15 years; but know of many people in "safe" neighborhoods who've had to makes claims for damages, theft and break-ins -- I feel like I'm footing their bills. Any chance anything will ever change?
Steve_Aronson: We all pay premiums based on what "might" happen. If sh.. didn't ever hapapen, you wouldn't need insurance. And, while you may not like it, more stuff happens to cars that sleep in the city and in the 'burbs. If you sold insurnace, wouldn't you charge more to someone you thought had a higher chance of a loss? While we may not like it, statistics prove this one out. Call you agent - see if there is a better program for you this year.
eb__Guest_: No...you said putting auto & home together will save money. If you write my homeowners, check my credit, you will see a Ch. 7 bkruptcy, throw me into Mass Fair Plan where my rate will TRIPLE, then how would that give me a savings on my auto? It is a flawed statement to say that bundling will save you.
Steve_Aronson: Some companies actually give you a discount if the same agent writes your home policy with another company - even the Fair Plan. And, so we don't mis-lead onyone, Fair Plan rates are not "TRIPLE" anyone's rate.
Tom__Guest_: Why do your rate increase happen mid-policy (as a result of accident, ticket, etc.) yet reductions or discounts (SDIP adjustments, etc.) not take effect until renewal?
Steve_Aronson: Accidents and moving violations are supposed to raise your rates only at renewal time (or, if you re-write your policy). They should not just pop-up mid-year.
MPS__Guest_: As the public gets more and more comfortable with the recent insurance reform and opening up the state system, we all know there will be more and more changes in 2009, 2010, etc. Do you anticipate future changes that will allow things such as education, credit scores, et al. to be looked at in order to write a policy?
Steve_Aronson: Education is already here. Many comapnies already offer a "good-student" discount. Credit scoring is currently forbidden in Massachusetts because it is seen as unfair to those who can least afford higher rates. Will the commissioner allow it next year --- not if you and others tell her how discriminatory it is. Speak up - your voice will be heard.
justin__Guest_: i have a #9 risk premium do to speeding tickets. will my insurance go even higher with the new system.
Steve_Aronson: Slow down!
Jenna__Guest_: Is it possible to get a policy for less than a year at a time?
Steve_Aronson: No. All Mass auto policies are for 12 months.
Steve_Aronson: Note: While shorter policies seem like a good idea now, while the rates are going down, they are a bad idea when rates start going up.
boston_irish__Guest_: Steve, did I read some insurance companies won't surcharge you if you have an accident? Where can we find out about good benefits like that?
Steve_Aronson: Some companies have a developed an "accident forgiveness" program. The rules are pretty strict. Talk to your agent.
ins_guy__Guest_: How proactive will you be in informing insureds with approaching renewals of possible lower premiums?
Steve_Aronson: Many agents are doing regular mailings to their clients (mine is). In addition, agent's websites will often provide more information.
DD123__Guest_: What can drivers with an SDIP of 6 expect to see in terms of rates once the competition kicks in? Will they be saving or paying more?
Steve_Aronson: Bad news ... probably going up. Gotta be more careful.
Eld__Guest_: With accident forgiveness, the insurance companies charge you to have that coverage.
Steve_Aronson: Nothing is for free. You need to compare the overall policy cost with the many coverage options available. No single coverage, policy or company is best for everyone. Try and figure that out yourself with an interent quote.
mr__frugel__Guest_: my daughter who is 18 had gotten into a fender bender and had to file a claim. Our insurance is renewing in July. Will the new system be more forgiving for one accident, and will the surcharges still last for 7 years?
Steve_Aronson: Surcharges generally last for 6 years, not 7. Some may reduce this to 3 years. Some companies may "forgive" this accident.
John__Guest_: How come YOU can only book business with companies you have a deal with? Why can't you as an agent shop around for a consumer to get the best deal possible for THAT driver?
Steve_Aronson: Frankly, I choose the fine companies I represent. I look for the ones who I beleive will help me offer the best coverage/service/price combination to my clients for the long run.
Mafiveo__Guest_: Why do we still have so many insurance "agents" in Massachusetts? What benefit do they provide vs. going to a company that will directly write the policy? It seems that in this day and age of the internet, middle-men are becoming less and less necessary. Just look at Realtors.
Steve_Aronson: My guess is that you don't have a relationship with your agent. www.cheapestautoinsurance.com will not be there when you and the claims adjuster don't agree. When "stuff" happens, and you need help with the "fine print", you'll quickly forget the cheap price and look for a local agent.
Steve_Aronson: We've run out of tiem today. I want to thank everyone who posted questions. Sorry I couldn't get to all of them today.
Steve_Aronson: Drive safely and your rates will go down!!!
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