Testimony in support of An Act to Reducing Automobile Costs and Premiums in the Commonwealth SB 522
Before Chairmen Koutoujian and Buoniconti and members of the Committee on Financial Services

Good afternoon. My name is Deirdre Cummings and I am the Legislative Director for the Massachusetts Public Interest Research Group (MASSPIRG).  MASSPIRG is a member-supported, statewide, non-partisan and non-profit public interest advocacy organization. I am here today to testify in support of An Act to Reducing Automobile Costs and Premiums in the Commonwealth, filed by Senator Tucker.

Automobile insurance is a significant, legally mandated household expense, without which consumers place their financial security and livelihood at risk. While rates have recently been on the decline, the average premium is still high – around $900 a year.

The number one complaint from consumers about their auto insurance is the high cost. The blame for the high cost belongs to Massachusetts’s ultra-high accident rate, as measured by claims data reported by the Insurance Research Council.* Massachusetts has the dubious distinction of having the highest accident rate in the country by far – an astounding 40% higher than the state with the second-highest rate, Rhode Island.  Even improving our worst-in-the-nation accident rate to second worst could drop our premiums by 20%, or nearly $200 on average per car per year, producing about $800 million in statewide savings each year.

The main factor driving our insurance premiums is our accident rate. Premiums have correlated at roughly the same rate as the accident rate. Therefore the most effective way to reduce Massachusetts automobile insurance premiums is to focus on reducing the underlying costs of our auto insurance system, including the state's high rate of accidents.

There are two good reports by the Insurance for Highway Safety that show concrete steps that can be taken to reduce crashes. Accidents are not happening haphazardly, according to a study by Richard Retting, at Insurance Institute for Highway Safety, published in August 2005. Many accidents occur in predictable locations and involve a predictable sequence of contributing events. Remedies can involve costly and or re-engineering of roadways – but not always. There are many simple and inexpensive roadway changes that can be effective in reducing or eliminating car crashes. It’s a matter of making it a priority, and involving the right people and providing resources where necessary. (Both reports are available on our website at

Retting, working with officials at the Virginia Department of Transportation, set out to reduce accidents along Leesburg Pike, a major artery in suburban Fairfax County, Virginia near Washington D.C. Retting’s team identified specific problem intersections, and identified problems that were contributing to the accidents. They then came up with appropriate counter-measures (moving bus stops, changing lights or signals, or markings on roadways to name a few), applied them and then evaluated the results. The results were significant.
At two of the six intersections where remedies were applied, crashes that were previously overrepresented were reduced to zero. At four other intersections, the targeted crashes were significantly reduced.  (See attached report)

One example from the report
Westbound motorists on Leesburg Pike used to find it difficult to turn left across several lanes of heavy traffic at Lewinsville Rd. The speed limit for oncoming traffic is 45mph, so vehicles were often approached the intersection at relatively high speeds. To make matters worse, the view for oncoming traffic is often obscured by eastbound vehicles, especially trucks and busses waiting to turn left. These factors contributed to an overrepresentation of potentially serious side impacts involving left-turning vehicles.

The Retting team installed a protected left-turn signal for westbound traffic. Plus they adjusted the timing of the signal for better traffic flow. The results were dramatic. The intersection went from an annual average of 4.6 left turn crashes before the interventions to not one such accident over the next 31 months, similar measures were applied at another intersection with equally dramatic results.

The Solution SB 522
An Act to Reducing Automobile Costs and Premiums in the Commonwealth will allow us to identify and adopt a comprehensive plan to reduce the state's underlying costs, including our high accident rate. The reforms to reduce the state's costs and accident rate must involve state and local government, the insurance industry, police, drivers and insurance regulators.

An Act to Reducing Automobile Costs and Premiums in the Commonwealth SB 522, establishes a special commission to investigate and study the impact and effects of automobile accidents in Massachusetts on automobile insurance premiums. SB 522 also requires the commission to develop a comprehensive plan to lower the state's accident rate. The commission will examine any other factors that affect the underlying costs, and therefore the premiums, of our auto insurance system.  This commission will submit a final report detailing a plan, together with analyses of costs and drafts of legislation necessary to implement the recommendations to the legislature within 180 days of its establishment. This investigation, study and report shall include, but shall not be limited to, a review of the following potential reforms;

- Identifying and redesigning the most dangerous intersections in the state;
- Adopting a primary seatbelt law;
- Informing drivers clearly and regularly about the full cost of at-fault accidents, speeding tickets, and other traffic violations on individual automobile insurance rates;
- Improving enforcement of traffic violations in conjunction with a review of existing traffic restrictions to ensure that they are appropriate, reasonable, and not unnecessarily restrictive such that they dilute the weight of their public safety purpose;
- Discounts for safer vehicles;
- Discounts for individuals who participate in driver education programs;
- Initiatives to combat drunk-driving;
- Discounts for consumers who agree to use their own health insurance in case of accident related injuries;
- Improving traffic lane markings, traffic lights and signals, and road/street signs;
- Prohibiting the use of wireless phones while driving;
- Making it easier for consumers to switch auto insurers;
- Disclosing and making accessible better and more information about discounts  that companies are offering;
- Eliminating incentives to engage in fraudulent activities, revising existing penalties for committing fraud, and increasing enforcement aimed at eliminating fraud;

While we have recently spent much time and debate reorganizing and deregulating much of our auto insurance rate setting system, it failed to include a  plan to tackle the problem of our highest-in-the-nation accident rate.  By doing so, we passed up an opportunity to have a significant impact on lowering out auto insurance premiums. We can and should address this issue now. I hope you will support this bill and pass it quickly from your committee.

*The Insurance Research Council’s (IRC) insurance property damage claim statistic. (There is no uniform data gathering on accidents, but property damage claims are a very good proxy.)  The data are on page 3 of the following link:

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