Economy's Impact on Auto Insurance

Automobile insurance across the state of Massachusetts has dropped dramatically since 2003, but law enforcement officials warn that tough economic times ahead could result in increased fraud (faked accidents, arson etc.)

In Lawrence Massachusetts, auto insurance claims in 2006 were $26 million less than in 2003, according to a new report by the Insurance Fraud Bureau of Massachusetts. Since Lawrence and area law enforcement officials formed the Lawrence insurance fraud task force in 2002, claims are down $31 million. The drop in overall claims is attributed to a reduction in fraudulent ones.

Statewide there has been a $549 million reduction in auto insurance claims in 2006 compared with 2003. The 13 communities like Lawrence with fraud task forces saw claims drop by a total of $273 million compared with 2003.

Fraud affects what auto insurance companies charge customers. This year, rates for good drivers in MA, on average, will go down 7.1% percent, after being slashed an average 11.7% the year before. But those accomplishments are under threat as the economy softens.