According to the Mass. Association of Independent Insurance Agents, a Massachusetts consumer recently filed a complaint with the Massachusetts Division of Insurance against Progressive Insurance for running a credit score without his knowledge or permission.  What was the response of the Mass. Division of Insurance?  “ As such, the Division of

Insurance finds no wrongdoing on behalf of the insurance company.” (Massagent.com)

Let me start off by saying that using credit scores for underwriting purposes is illegal in Massachusetts.  Since its entry here in Massachusetts, Progressive has had complaint after complaint against it and gotten nothing more than a slap on the wrist from the Division of Insurance.  They had a consumer complaint ratio close to 3 times higher than the 4 largest auto insurance companies in Massachusetts (See the Chart Below).  Oh and by the way they also got approved by the Division of Insurance to raise their rates by 5% effective 4/1/09 (SEE the Duffy Insurance BLOG “10 Dirty Tricks of Insurance Companies”  #1 The Bait and Switch).  How can the Division of Insurance continue to bend the rules for Progressive and other new entrants to Mass? 

Make no mistake about it, Progressive is a great company with a wonderful marketing strategy.  In fact, Duffy Insurance writes commercial auto insurance in Massachusetts for Progressive.  However, the personal auto insurance “managed competition” that is new to Mass. was put in place to help the consumer.  It seems as though, the Division of Insurance has forgotten about the consumer and the insurance companies and agents that have been here for years.  The Division of Insurance will do anything to help Progressive and other new market entrants at the expense of the consumer.

            From 1997-2007 (under the “old auto insurance system”) the rates we pay as Mass residents dropped by close to 25%!  Can you think of another Mass. industry with such dramatic reductions in that ten year span?  There are few if any.  PREDICTION: Auto Insurance rates over the next 5 years in Massachusetts will be on the rise and the Division of Insurance will do nothing about it.  You heard it here first. 

            It makes you wonder as a Mass. resident, what was the point of this “auto insurance reform?”  Why fix something that isn’t broken?  Why allow companies to set the rates of something that we are forced to buy?  Trust me, I am all for the free market.  But, auto insurance is different.  If we are required to buy this by law, there has to be protective laws written so that companies cannot do as they please and hurt consumers. 

            The Mass. Division of Insurance is doing us a disservice as Mass. residents by allowing these insurance companies to play by their own rules.

Take action now by e-mailing the Attorney General and your local rep.  Here is the e-mail address of the Attorney General; emailcomplaints@state.ma.us.