Healey pushes insurance regulators to cut Massachusetts auto rates amid coronavirus pandemic

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Attorney General Maura Healey is asking the state to make auto insurance companies cut rates during the coronavirus crisis, when travel has dropped significantly. “There is already data showing a large decrease in travel in Massachusetts,” Glenn Kaplan, chief of Healey’s Insurance & Financial Services Division, wrote in a letter […]

Attorney General Maura Healey is asking the state to make auto insurance companies cut rates during the coronavirus crisis, when travel has dropped significantly.

“There is already data showing a large decrease in travel in Massachusetts,” Glenn Kaplan, chief of Healey’s Insurance & Financial Services Division, wrote in a letter Monday, saying that recent data has shown that people are traveling 50% to 55% less.

The letter was sent to Commissioner Gary Anderson of the Massachusetts’ Division of Insurance, which regulates the providers.

The DOI said in a statement that it’s working with insurers individually, and will keep doing so. A spokewman said, “As a direct result of conversations the Division of Insurance has had with a number of carriers, as of Friday, April 10, carriers representing 80% of the private passenger auto insurance market have filed or identified that they will file to make these refunds.”

Healey said in a statement, “People all across the state are staying home to reduce the spread of COVID-19. As a result, there are fewer drivers on the road, fewer car accidents, and lower risk involved, so people should be paying less. At a time when many are struggling financially, we should do everything we can to cut costs for families.”

Several insurers have taken steps on their own to give rebates or credits for the coming months. The AG’s office says it will “encourage” others to do the same. Healey doesn’t have direct authority over the DOI, but state law requires that the insurance division not allow for rates deemed excessive.

Insurers have cited the huge decreases of travel during the coronavirus pandemic, saying travel, crashes and claims are all down.

The letter said, “While data are not yet available regarding the reduction in Massachusetts automobile accidents resulting from a decrease in driving, an analysis for California indicated that a 60% reduction in driving has resulted in a 50% reduction in accidents.”

California on Monday announced the kinds of changes Healey’s calling for, ordering companies to begin issuing rebates to customers.

Insurance companies have 120 days to comply. They can refund premiums, reduce them or give customers a credit. Refunds can be based on an estimated change in risk, with amounts based on an average percentage.

In Alaska, the director of the state’s Division of Insurance issued a bulletin last month urging insurers to reduce or refund premiums. Healey issued a similar call last week directed at the insurance companies themselves.

David Sampson of the American Property Casualty Insurance Association criticized the order and said California should let the private market resolve the situation.

Herald wire services contributed to this report.

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