The right choice on auto insurance

From the Boston Herald



In the confusing debate over auto insurance reform ? dueling TV ads being the latest addition to the mix ? there is no escaping one simple fact:



Like rats leaving a sinking ship, insurance carriers have been fleeing Massachusetts in droves over the past decade. Today, only 19 insurers write auto insurance policies here. In January, it will be 18.



Anyone with a clue knows why. There is zero competition in the auto insurance market in the Bay State. Our byzantine bureaucracy tells insurers exactly what they must offer ? and what they must charge, the only state in the nation to do so.



The system stifles competition. The method used to apportion high-risk drivers is unfair and unwieldy and there is no incentive to root out fraud, so Massachusetts drivers are filing more claims than those in any other state.



And that leads us to the impact on the consumer. Good drivers pay far more than they should to subsidize higher-risk drivers. There is no choice. And the result is Massachusetts drivers pay the fourth-highest rates in the nation to insure their cars.



It?s time to fix the system, and Gov. Mitt Romney?s proposal ? set for a hearing at the State House today ? is the place to start. It reintroduces competition to the marketplace. It cracks down on fraud. And it will save money for the majority of drivers.



Don?t be fooled by the ubiquitous ?The governor thinks I?m a reject? ads. They?re backed by select insurers that oppose the reforms in the governor?s plan because they would be forced to share more of the burden for insuring high-risk drivers.



And no great surprise ? the ads don?t tell you the whole story. Yes, if the state is no longer setting rates, insurers will be able to consider factors like creditworthiness in determining what they charge. That is obviously to the benefit of responsible drivers with clean driving records, but the small percentage of high-risk drivers won?t be left on the side of the road, uninsured, as the ads imply. There are clear protections built into the bill.



The Legislature has been stalling on the auto insurance reform front while it focuses on health care, and so much of that debate has been about giving insurers flexibility to provide lower-cost products. It?s not exactly an apples-to-apples comparison, but clearly some lawmakers see the benefit of competition in the insurance marketplace. Let?s hope they bring that same sensibility to the debate on auto insurance reform, where it is needed the most.