Massachusetts was a suitable location for an initial attempt for automobile insurance reform. Because of high accidental injury claim frequency and average payments per claim, their state continues to be plagued for many years with expensive automobile coverage. Opinions differ as to why this is the situation, but it’s assumed how the costs of Massachusetts automobile insurance escalated due to obvious physical deficiencies .
Road systems are poorly designed, dangerous, and perhaps obsolete. Unpredictable New England weather conditions make driving treacherous teenagers on the better of highways. Massachusetts daily generates massive volumes of traffic, especially during wintertime, when most commuting occurs in darkness. Superimposed upon unusually unsafe driving conditions is the insistence of Detroit to produce overpowered and uncrashworthy automobiles unsuited to safeguard occupants from the dangers brought on by collisions even at low speeds. High insurance rates were also in part because of spotty police force. The share of Massachusetts drivers found guilty of moving traffic violations remained the best in the united kingdom. The Massachusetts conviction rate was one-sixth those of the Pacific coast states for corresponding years through the late 1960’s.
Besides factors incidentally related to insurance, the system of compulsory insurance that existed in Massachusetts texas insurance discounts since 1927 encouraged accidental injury claims. Massachusetts’ compulsory insurance liability law never was accompanied by a compulsory property damage law. This resulted in property damage claims were frequently submitted disguised as injury claims to force away the potential deficiency of coverage to cover the repair bill for a damaged automobile. This practice was common that, when insurance reform was initially being considered, the phe-nomenon of damage to property claims filed as injury claims was known as a substantial rating factor by every directory Bay State insurance. Because of the rewards and low personal likelihood of filing such fictitious claims, this custom overlapped into cases which were absolutely fraudulent.
However the principal aspect in the unusually steeply-priced automobile insurance in Massachusetts was obviously a statute that handed towards the commissioner of insurance the ability setting rates so long as he deemed them just, reasonable, adequate, and nondiscriminatory. Uniform rate-setting triggered the removal of any market-place competition on the list of insurers. By law, no insurance provider was allowed to sell compulsory car insurance at rates below those set through the commissioner. This discouraged a number of the better managed companies from operating in Massachusetts.
The system seemed to be frustrating and slow. In certain counties it took three to four years to receive a jury trial. Nor did the firms do anything whatsoever to expedite claim payment by efficient handling, complaining instead in regards to the sheer volume. Through the late 1960’s, it had been apparent that the drastic overhaul of auto insurance was needed. It absolutely was using this starting point that no-fault car insurance began its journey from abstract principle to political reality.
It began if the Keeton-O’Connell plan found the eye of Representative Michael Dukakis, who were a former student of Robert Keeton at Harvard Law School. Dukakis arranged a conference with Keeton to talk about the master plan; and also the movement for the passage of Massachusetts no-fault was arrived. Within weeks, it absolutely was filed by Dukakis inside the Massachusetts Legislature and being considered with a joint legislative committee on auto insurance. In spite of the truth that the committee recommended against it, in August, 1967, the Keeton-O’Connell plan was taken to the floor from the Massachusetts House of Representatives, the low branch from the Massachusetts Leg-islature, for any vote. For the surprise of everybody, including Dukakis, into your market was went by the House and delivered to the Massachusetts Senate for concurrence. Panic occur, and the insurance industry and also the bar, acting in concert, exerted their influence on the Senate, urging it to defeat the program.