Auto Insurance: Car Drivers Lose Right to Appeal

Jeffrey Krasner from The Boston Globe reports today that ‘Drivers are Losing a Right to Appeal’ as insurers are to decide on surcharges.

The state’s new insurance system is intended to save drivers money by spurring competition among insurers on price, service, and features. However, it could mean that some Massachusetts drivers could pay hundreds of dollars more for insurance. – Boston Globe

Due to the adoption of the new managed competition system for auto insurance rate setting in Massachusetts, State Insurance Commissioner Nonnie Burnes says the Division of Insurance Board of Appeal is no longer necessary since insurers set their own rates and penalties for drivers.

The board, which dealt with about 50,000 surcharge disputes per year, will be dissolved on April 1. Some lawmakers, however, are on a mission to draft legislation to maintain the board.

Burnes says that the appeals board costs consumers $50 per case and cases take up to six months to be heard, which she calls “anti-consumer.” Consumer advocates, on the other hand, say improperly assessed surcharges can cost consumers thousands in additional premiums per year.

Burnes suggests consumers seek out plans with “accident forgiveness” options, which do not charge drivers extra for accidents.

Meanwhile, she notes a proposed system would enable consumers to have surcharges reviewed, but for now, her office says it will help consumers navigate the appeals process with their insurers.