On April 1, 2008, Massachusetts began its policy of “managed competition” for auto insurance premiums. Instead of requiring every company to charge the same rates, the state now allows insurers to set their own rates. The new rules were enacted with the hope that price competition would lower costs for consumers who have been paying some of the highest auto insurance premiums in the U.S. 

Although the new system has not yet brought the dramatic company-to-company price differences we see in other parts of the country, where companies have even more latitude in setting their rates, most insurance consumers in Massachusetts do have much to gain by shopping around for the best rates— 

• When we checked rates for one illustrative driver with a clean driving history living in Cambridge, annual premiums for standard auto insurance coverage ranged from $736 to $1,092, a difference of over $350 per year. Even with Commerce, the state’s largest insurer, the annual rate was $1,010—$274 higher than the lowest rate. 
• If you’ve had an at-fault accident in the last five years, the rate differences loomed even larger: from $1,230 to $1,702 per year. 
• If you have someone with less than three years’ driving experience on your policy—a nightmare for most insurers (and most parents)—the most expensive rate was more than $700 higher than the lowest. 
• Have more than one car to insure? You can expect your potential savings to be even larger. 

You can obtain comparative rates for yourself by visiting the state’s “Insurance Premium Comparison” website at www.autoratecompare.doi.state.ma.us. 

It takes a little effort to shop for insurance. To get the best rate, you might have to call multiple companies or agents for quotes, since few of the auto-insurance companies writing policies in the state yet have websites that provide online quotes. Fortunately, at www.autoratecompare.doi.state.ma.us the state is maintaining a database of companies’ current rates for several sample profiles that will help you narrow down choices to those companies that likely will have the best rates for you. And even if you have to request quotes by phone from companies and agents, the effort is small compared to the potential year-after-year savings. 

You won’t want to give up having a company that will deliver quality service, financial soundness, and a willingness to stick with you if you have an accident or violation or two. But you don’t have to. Such concerns are not a reason to stand pat. 

In this article, we will give you the background you need to shop successfully and on our Ratings Tables, comparisons of individual companies to help you focus your shopping efforts on the best prospects. 

What’s Covered? How Much to Buy? 

The first step in shopping is to decide on the types and levels of coverage that will keep your risk to an acceptable level, at a reasonable annual premium cost. You will have to decide among a broad range of available auto insurance coverage options. When thinking about how much coverage to buy, try to keep in mind that the purpose of insurance is to protect you from losses that you can’t afford to cover yourself. When you buy more insurance than you need, you are wasting money that goes to insurance companies’ profits and administrative costs. 

Coverages You Must Buy—Parts 1 to 4 

Part 1: Bodily Injury to Others 

Compulsory Bodily Injury to Others coverage pays for damages (for example, medical expenses or pain and suffering) to anyone injured or killed by your car, but only in an accident that occurs in Massachusetts, up to a basic limit of $20,000 per person and $40,000 per accident. Injuries to the driver or passengers in your car are not covered under this Part. If you want coverage when driving outside of Massachusetts, or in places where the public has no right of access, or for guests who ride in your car, you will need to purchase Optional Bodily Injury to Others (Part 5) coverage. 

Part 2: Personal Injury Protection (PIP) 

Personal Injury Protection (PIP) coverage pays up to $8,000 to you or anyone you let drive your car, anyone living in your household, passengers, and pedestrians, no matter who causes an accident. PIP coverage pays for medical expenses, replacement services, and 75 percent of any lost wages. PIP coverage includes protection for owners of cars and motorcycles, and members of their households, if they are injured while occupying, or struck by, a car that does not have Massachusetts Compulsory Insurance. 

If you have medical insurance (a health plan), you can turn to PIP coverage rather than your health plan for payment of medical expenses up to $2,000, but if you seek payment from your PIP coverage for medical expenses in excess of $2,000, PIP will pay only after these expenses have been submitted to the health plan to determine what it will and will not pay. Your PIP coverage will not pay for expenses over $2,000 that your health plan would have paid if you had sought treatment in accordance with the terms of the health plan. 

 The driver and passengers riding a motorcycle are not covered by PIP. But the owner of the motorcycle must purchase this coverage to protect other people who may be injured by the motorcycle. 

You can save on your premium by agreeing to have a deductible, applicable either to you alone or to you and other members of your household. The policy will pay expenses for you, or you and your household members, only up to the difference between $8,000 and the amount of your deductible. 

The option of taking a deductible is more attractive if you have a health insurance plan and a disability income plan. But even if you have a health insurance plan, that plan may not cover all of your accident-related medical expenses—such as for cosmetic and dental services, co-payments, and deductibles—so PIP coverage might still be of use to you. As Figure 1 shows, taking an $8,000 deductible for PIP coverage instead of a $0 deductible usually only saves about three percent off a policy’s total cost. 

Part 3: Bodily Injury Caused by an Uninsured Auto 

Coverage for Bodily Injury Caused by an Uninsured Auto protects you, anyone you let drive your car, household members, and passengers (unless covered by another Massachusetts policy with similar coverage) against losses caused by an uninsured or unidentified (“hit and run”) driver. A minimum limit of $20,000 per person and $40,000 per accident is required. This coverage does not pay for property damage or damage to your auto. Many consumers raise their policies’ limits for this coverage to match the optional, higher limits they choose for bodily injury to others coverage (described below). Raising this coverage from the minimum limits to typical $100,000/$300,000 coverage levels typically only costs an additional three percent of a policy’s total annual cost. 

Part 4: Damage to Someone Else’s Property 

Coverage for Damage to Someone Else’s Property pays not only for damage to another person’s property but also for costs associated with the loss of use of that property when you, a household member, or another authorized driver of your car causes an accident. A minimum limit of $5,000 is required but you can purchase higher limits and might want to do so to protect yourself in case you become liable for the kind of large expenses that might result if you cause one or more other cars to be totaled or seriously damaged. It usually adds only about four percent to total premium costs to increase the minimum $5,000 limit to a $50,000 limit, and going from a $50,000 limit to a $100,000 limit will cost most policyholders only a few dollars more per car each year. 

Optional Coverages—Parts 5 to 12 

Part 5: Optional Bodily Injury to Others 

Coverage for Optional Bodily Injury to Others extends your liability protection (the basic $20,000/$40,000 limits under Compulsory Bodily Injury to Others). This option provides coverage for accidents beyond Massachusetts to anywhere in the U.S., its territories or possessions, or Canada. This coverage also pays for damages suffered by guests in your auto. And under this option, you can increase the coverage limits above the $20,000/$40,000 limits for Compulsory Bodily Injury to Others (Part 1). 

Most drivers buy coverage above the basic $20,000/$40,000 limits—perhaps out of a social concern for the possible victims of their negligence or perhaps out of a personal concern to protect their assets from catastrophe. If you have substantial assets (or expectations of substantial assets in the future), that is a compelling reason to purchase sizable additional bodily injury coverage: you have a lot to lose; you are an attractive target for suit; and you might get relatively little sympathy from juries. 

Although buying coverage with higher limits will cost more, the cost increases are often modest. As Figure 1, a policyholder with $50,000/$100,000 optional bodily injury coverage might expect to increase his or her total annual premium by only about five percent by moving up to $100,000/$300,000 coverage, and buying coverage at $250,000/$500,000 limits would only increase his or her premium by about 12 percent. Most consumers consider these extra costs a reasonable expense for increased peace of mind. 

Part 6: Medical Payments 

Medical Payments coverage pays for medical expenses for you, your household members, and passengers, over and above amounts covered by Personal Injury Protection no matter who caused the accident. The minimum amount you can buy is $5,000. Minimal Medical Payments coverage is relatively inexpensive, costing only about $17 per year per car for most consumers, but it still may not be a good option for you if you have a good health plan. Increasing medical payments coverage to a high limit—say, $25,000—is also relatively inexpensive. But you likely will do better to spend your money instead on a more comprehensive health insurance policy, since good health insurance coverage would protect you and your family from catastrophic expenses caused by any disease or injury that might befall you, not merely to cover limited amounts of expenses resulting from injuries that involve automobiles. 

Part 7: Collision 

Collision coverage pays for damage to your car in a collision, less any applicable deductible, no matter who causes the accident. If your car is financed, your lender may require this coverage as well as a particular deductible amount. 

Most policyholders have $500 deductibles, but you can select a different amount. You can save a substantial amount on your premium by choosing a larger deductible. As Figure 1 shows, our illustrative policyholder would usually save about 15 percent off his or her total premium by increasing the Collision and Comprehensive deductibles from $500 to $1,000. 

In determining the amount of deductible that is right for you, decide how much you can afford to pay out of your own pocket in the event of an accident or loss in which you are at fault, or the other driver is unidentified. It doesn’t make sense to buy insurance of any kind—including Comprehensive coverage described below and PIP coverage described above—for expenses that would not be catastrophic for you. (Insurance generally costs more than the company’s expected payout for losses because the insurer must charge you not only for the losses but also for sales commissions, administrative expenses, claims-handling expenses, fraud losses, and other costs.) 

If your car is old and not worth much, it doesn’t make sense to buy Collision (or Comprehensive) coverage; you don’t have much to lose. 

Part 9: Comprehensive 

Comprehensive coverage pays for damage to, or loss of, your car, less any applicable deductible, resulting from perils such as fire, theft, vandalism, and striking an animal, but not a collision. Personal property is not covered unless it is permanently installed in your car as, for example, a CD changer might be. If your car is financed, your lender may require this coverage. 

You may be denied Comprehensive coverage or required to pay a higher extra-risk rate if you own a high-theft vehicle that does not have a qualifying anti-theft or recovery device. Coverage may also be denied or priced higher under certain other conditions. 

As with Collision and PIP coverage, having a relatively high deductible under your Comprehensive coverage is a way to hold down your total premium costs. 

Part 10: Substitute Transportation 

For an additional premium, you can broaden your comprehensive coverage to include reimbursement for the expense of a rental car and taxi, bus, and train fare while damages to your car are being repaired. 

Given that even a modest level of coverage—typically $30 per day with a limit of $900 per claim—usually costs $30 to $60 per year, our advice is to decline it altogether, since the additional premium costs are very likely to exceed any benefit you’ll ever collect. 

Part 11: Towing and Labor 

Towing and Labor coverage pays up to $50 for towing and labor charges each time your car stops running whether or not there is an accident involved. You are covered only for the on-site labor costs at the breakdown site (not any parts) needed to get your car towed or running again. This coverage usually costs $6 to $12 per year, and some insurers offer this coverage at no additional premium cost. Coverage of up to $100 per disablement is available for usually double the cost of standard coverage. 

If you belong to a motor club, you probably don’t need this coverage since many motor clubs’ services include towing and labor. 

Part 12: Bodily Injury Caused by an Underinsured Auto 

Coverage for Bodily Injury Caused by an Underinsured Auto pays for bodily injury damages to you, household members, and passengers, unless they have a policy of their own, or are covered by a Massachusetts auto policy of another household member with similar coverage. The accident must be caused by someone without enough bodily injury coverage to pay for your loss. This coverage pays you up to the difference between the total amount collected from the bodily injury liability insurance covering the owner and driver of the other car and the limits you purchased for this coverage. 

Massachusetts has relatively few uninsured drivers compared to many states, but many Massachusetts drivers buy only minimum required amounts for Bodily Injury to Others. 

You may purchase both Uninsured Auto coverage and Underinsured Auto for coverage up to, but no more than, the limits of the Bodily Injury to Others coverage you carry. In general, it makes sense to purchase as much of the Un/Under coverage, which protects you, as you purchase of coverage that protects others. 

Your Un/Underinsured coverages will not pay for damage to property. 

The Whole Package 

Armed with knowledge of various possible coverages, you can ask each company you consider to give you a breakdown of its premium by type of coverage and to quote premiums for different liability limits and deductible levels. A typical annual premium quotation might look like the following: 

Part 1: Compulsory Bodily Injury to Others    $201 

Part 2: Personal Injury Protection—$8,000    $54 

Part 3: Bodily Injury Caused by an Uninsured Auto—$100,000/$300,000    $17 

Part 4: Damage to Someone Else’s Property—$100,000    $258 

Part 5: Optional Bodily Injury to Others—$100,000/$300,000    $130 

Part 6: Medical Payments—$5,000    $17 

Part 7: Collision—$500 deductible    $440 

Part 9: Comprehensive—$500 deductible    $109 

Part 12: Bodily Injury Caused by an Underinsured Auto—$100,000/$300,000    $33 

Total    $1,259 

How Are Premiums Determined? 

The company you choose and the coverage types and levels you select are critical to your costs, but so are various facts about you and the vehicles you drive. Some of these facts are beyond your control; some you can change, and in doing so substantially affect your annual insurance costs. 

Your Driving Record 

Your driving record is very important. Industry data indicate that an individual who has had two accidents in the past two years is almost two-and-a-half times more likely to have an accident in the coming year than someone who has had no accidents. Similarly, the accident rate for individuals with two traffic convictions in a three-year period is twice as high as the rate for those with no convictions. 

It will come as no surprise, then, that your previous driving record will have a big impact on the best rate you can get. 

Under the state’s new rules, insurance companies now can either continue to set rates using the state’s old Safe Driver Insurance Plan (SDIP) or use their own “merit-based” systems—which must be approved by the state—to rate drivers based on their driving records. No matter which manner the companies use, drivers who have not caused an accident or had traffic violations in the last five or six years can expect to receive the best auto-insurance rates; those who have had accidents or traffic violations pay higher rates. 

It is difficult to predict exactly how much one speeding ticket or one accident will affect how much more you’ll have to pay in premiums. But our estimate is that having even one speeding ticket in the last five years will usually cause premiums to increase, on average, by about 18 percent. Having two speeding tickets will result in having a more substantial cost increase—an additional 60 percent per year. 

Having a previous accident will often be even more costly than if you just had a speeding ticket. We estimate that having one at-fault accident in the last three years will cost most drivers an additional 57 percent per year in premiums, and two at-fault accidents will for most drivers more than double their annual premiums. 

Most companies consider the driving records of everyone who will be driving your car or cars. Therefore, if you have a perfect driving record but your spouse has had violations or accidents, you may not qualify for the companies’ best rates. 

Fortunately, even if you’ve recently had an accident or tickets, the insurance companies can’t hold it against you forever. Whether an insurance company chooses to use the state’s formula or its own for deciding how much to penalize drivers for having accidents or tickets, the system will incorporate a “merit-based” rating system that rewards safe driving and will wipe out penalties for previous accidents and tickets after a policyholder has gone for a period of years without another accident or ticket. 

Your Experience and Training as a Driver 

How much driving experience you have has a strong relationship to your likelihood of having accidents and claims, and therefore will have a big effect on your rates. 

In Massachusetts, insurers can’t use age of drivers to set rates, but they can charge higher rates if you will have an inexperienced driver on your policy. Usually, companies classify drivers into three length-of-experience levels—inexperienced drivers licensed less than three years, inexperienced drivers licensed three or more years but less than six, and experienced drivers (licensed six or more years). Inexperienced drivers are further classified according to whether they are the principal operator of a vehicle or only an occasional operator. 

A principal operator with four years’ driving experience can usually expect to pay roughly double the rate of an experienced operator. A principal operator with only one year of driving experience will usually be charged more than three times the rate of an experienced driver. Having an inexperienced driver on your policy as an occasional driver of a vehicle rather than the principal driver of the vehicle will usually not cause such a large differential, but still will dramatically increase the total cost of the policy. 

Message to parents: have your kids take driver training. Most companies give discounts—typically 10 percent—for inexperienced drivers who have completed an approved driver training course. Message to not-so-considerate kids: even if you don’t have much interest in driving, think about getting your license as soon as you can so that you put in some or all of your time at the higher, inexperienced driver rates while your parents are picking up the tab. 

Where You Live 

Insurance costs are unlikely to influence your choice of where to live. But you may be interested in knowing the cost differences from area to area. Premiums are affected greatly by where policyholders live—for one profile we looked at, the policyholder would pay between $582 and $826, depending on the insurance company chosen, if he or she lived in Lexington and $912 to $1,413 if he or she lived in South Boston. 

The Type of Car You Drive 

You probably won’t want to choose the car you drive based on insurance costs. But the differences among cars are often substantial, as Table 1 shows. The policyholder for whom we made comparisons on Table 1 would pay almost $200 more in insurance costs each year to drive a BMW 530i than to drive a Toyota Camry. Even among cars that are more nearly comparable, there are substantial insurance cost differentials—for example, an average $92 annual premium differential between the Camry and the Nissan Maxima. It is not unusual for car-to-car insurance cost differences to total more than $2,000 over the time a policyholder will own a car. 

Keeping an old car, or buying used, can also have a substantial effect on your insurance costs. For example, having a 2002 Honda Accord will usually result in insurance costs that are about 12 percent lower than with a 2005 Accord. As mentioned above, you’ll also save by driving an older vehicle if you drop collision coverage for it, since the loss of an older car will probably not be a financial catastrophe for you. 

Your insurance premiums will also be slightly reduced if your car has safety devices or anti-theft features. Companies must give a 25 percent discount on PIP, Medical Payments, and Uninsured/Underinsured Motorist coverages for cars with passive restraint systems (air bags or automatic seatbelts). If your vehicle has anti-theft devices, your company must give you a discount off your comprehensive coverage, from five to 36 percent off, depending on the type of device. Your insurance company or agent can provide you with a list of the qualifying anti-theft devices and the corresponding discounts available. 

In short, you will want to consider insurance costs when deciding what vehicle to drive (and to some extent, how to equip it). You can find information on relative insurance costs in The Car Book, by Jack Gillis, which can be ordered from the Center for Auto Safety at www.autosafety.org or by calling 202-328-7700. For information on safety ratings, you can consult Consumer Reports and the Insurance Institute for Highway Safety (www.iihs.org). 

Big Breaks for Seniors 

You can’t control your age, but you can at least be sure that your premium reflects an important discount if you are age 65 or older. All insurers must offer policyholders who are age 65 or older a 25 percent discount off their total premium if there are no inexperienced drivers on the policy and their cars are not customarily used for business purposes. 

How Much You Drive 

If you drive your car 5,000 miles or less each year, companies must give you a 10 percent discount off your premium (except the portion of the premium for comprehensive, substitute transportation, and labor and towing coverages). Most companies also give a small discount if you drive your car between 5,001 and 7,500 miles. 

Length of Time Insured by the Company 

If you are considering switching insurance companies, and have been “loss free” with your current company for a while, you will want to consider in the calculation any longevity discounts your company will be granting you in the future. Many companies offer “renewal” discounts each year. Some give discounts of five to 10 percent for three years of coverage without an at-fault accident and may increase the discount at six years and nine years. 

Dual-Policy Deals 

If you have more than one car, most companies will offer you “multi-car” discounts for insuring both with them. The discounts offered vary by company, but a discount of 30 percent for both cars is typical. 

Many insurance companies also offer lower rates if you insure both your car and your home with them. Some knock off five percent, 10 percent, or even more from either the auto rate or the homeowners rate; some knock off a percentage from both. From a consumer’s point of view, this dual-policy pricing is an undesirable practice because it makes shopping more difficult; to find out the exact savings you might realize by switching companies, you have to shop for both types of coverage at once. 

Other Discounts 

Several of the insurers offer five to 15 percent discounts to groups—employees of specific companies and members of employee associations, alumni associations, and others. You will do well to check the Division of Insurance website at www.state.ma.us/doi/ for the list of groups to see which ones you can qualify for. Several groups whose members can get 10 percent discounts are open to anyone. For example, at the time of this writing, it was possible for anyone to join the Conservation Law Foundation for a $30 annual membership fee and thus qualify for a 10 percent discount off the cost of insurance with Plymouth Rock. When we checked rates for a sample profile of a driver with 25 years of driving experience living in West Roxbury, Plymouth Rock was $58 more expensive than AIG. For someone who joined the Conservation Law Foundation, Plymouth Rock would be $42 less expensive than AIG. 

When we checked, even with a 10 percent group discount, other companies rarely beat the rates shown on the state’s premium comparison website for Progressive, but among the remaining companies, the group discounts would often cause another company to beat out, or come close to, what the state’s website indicated was the best-priced company. So, checking on available group discounts might lead you to insurance company choices that you would prefer for service or other reasons, but that would be unacceptably expensive without a group discount. 

If you regularly use mass transit, some companies give a 10 percent discount on property damage and collision coverages, so long as you provide evidence of purchase of at least 11 months of commuter passes. 

Some companies also give discounts for inexperienced drivers who are full-time students and have good grades (typically, average grades of “B” or better). If you have on your policy a student who lives at least 100 miles away at school, without a car, some insurance companies will give you a considerable price cut. 

Who Offers the Best Rates and Service? 

You have two main considerations in choosing among auto insurance companies: how much they charge and how good their service is. You may also want to give some thought to a company’s financial stability and a few other factors. 

Shopping for Low Premiums 

To start, visit the state’s premium comparison website at www.autoratecompare.doi.state.ma.us and choose the profiles that are closest to your own. The website will show you insurance rates from all the companies operating in Massachusetts. The state’s Division of Insurance told us it plans to keep the site up-to-date with companies’ current rates for the foreseeable future. 

As you can see from the state’s site, the company-to-company rate differences are substantial—annual differences of hundreds of dollars in almost all cases, and over $700 in some cases. The profiles the state uses will probably not apply to you exactly, but the rates will give you a good starting point for your own shopping. Companies with low rates on the state’s site will likely be excellent prospects for you. 

When you have identified a few possible companies, you can begin shopping. A few companies enable you to get quotes directly from their company websites, but most of the insurance companies don’t yet have online quoting capabilities for Massachusetts, so you have to call them directly or call their agents, depending on how the companies write policies. 

Before shopping, it’s a good idea to make a list of the coverages you plan to purchase. Some “independent” agents sell policies offered by many companies, so one of these agents can give you quotes from various companies. But other companies are not available through independent brokers or agents; to get these companies’ rates, which often are the lowest rates available, you have to get a quote from their websites or contact their agents directly. 

If you will be contacting agents, you may have to push hard to get reliable information from them. We have found that most agents are able to quote accurate insurance rates, but some agents quote wildly inaccurate rates, while others try repeatedly to sell more insurance than asked for or fail to mention the most attractive available plans. Always ask an agent whether he or she has any other plans with better rates. 

If you have so many accidents or violations that it is difficult for you to find coverage, you have the right to get insurance through MAIP, the state’s “assigned risk” plan. Rates in this plan are usually much more expensive than what you’d pay for a regular policy. 

Shopping for Service 

You will want to consider price in relation to the quality of service you can expect the different companies to provide. Probably the most important type of service is claims handling. We give you three types of information to help you evaluate companies’ service: a survey of policyholders, a survey of auto body shops, and an analysis of complaints. 

Our Survey of Policyholders 

We surveyed CHECKBOOK and Consumer Reports magazine subscribers and collected more than 1,300 ratings of individual insurance companies from policyholders who said they had made an auto insurance claim within the preceding three years. 

As you can see from our Ratings Tables, there are big differences in how companies were rated by their customers. For example, USAA and Amica Mutual were rated “superior” for “simplicity of claim procedures” by 89 percent and 84 percent of their respective surveyed customers. In contrast, OneBeacon got “superior” ratings from only 34 percent of its surveyed customers, Citizen’s from only 35 percent of its surveyed customers, Encompass from only 36 percent, and Commerce from only 48 percent. (For a further description of our policyholder survey and how its results and our other research results should be interpreted, see our How We Rated the Insurers page.) 

Asking the Experts: Auto Body Shops 

As a second way to assess service quality, we surveyed area auto body shops, asking them to name the two insurers they considered “most desirable” for “treating their customers (car owners) fairly” and the two insurers they consider “least desirable.” 

Our Ratings Tables show the number of times each company was mentioned (either favorably or unfavorably) and the percentage of the mentions that were favorable. As you can see, Amica Mutual, Citizen’s, and USAA were all highly recommended by surveyed body shops. Commerce, the state’s largest auto insurer, received mixed ratings from surveyed shops. And Encompass, OneBeacon, and Progressive received the highest percentage of “least desirable” mentions. When we checked, Progressive had some of the lowest rates for all of the profiles we looked at, so it is worth noting that in all of the seven metropolitan areas where we publish CHECKBOOK, Progressive got some of the lowest ratings from body shop owners (see Table 2)—and also got below-average ratings for “adequacy of claims payment” from consumers. 

Complaints 

Another way to assess quality is to count policyholder complaints. While customers might have rated a company less than “superior” on our survey of policyholders even if the company’s deficiencies were minor, filing a formal complaint with a government regulatory agency presumably reflects serious dissatisfaction. 

On our Ratings Tables, we have reported the number of private passenger auto insurance complaints filed in 2005, 2006, and 2007 with the Massachusetts Division of Insurance. We have also reported a “complaint rate” for each company. The complaint rate is intended to take into account the fact that some companies do much more business than others and therefore are more exposed to incurring complaints. It is calculated as a company’s total number of complaints during 2005, 2006, and 2007 per million dollars in direct private passenger auto insurance premiums written. 

The companies or groups listed on our Ratings Tables with the lowest complaint rates are USAA and Norfolk & Dedham, while Citizen’s, OneBeacon, and Metropolitan have the highest. 

Checking For Solvency 

In shopping, you will want also to be alert to news of a company’s financial instability. You will not want to sign on with a company that may soon have to raise prices sharply to stay alive. Nor do you want a company that may go out of business soon, forcing you to begin your shopping again. This is, of course, more of a concern now than a few years ago. 

On the other hand, there is no reason for great anxiety about insurer instability. If a company goes bankrupt, policyholders may have to wait to recover money owed them but generally are protected from major losses. A special “insolvency guaranty fund” exists in every state with the duty to assess all insurers doing business in the state on a pro-rata basis to pay off all outstanding claims of an insolvent company and reimburse each policyholder’s paid-in premium. 

You can check on a company’s financial soundness using any of several sources: 

• A.M. Best Company
  908-439-2200, www.ambest.com 
• Fitch Ratings
  212-908-0800, www.fitchratings.com 
• Moody’s Investor Services
  212-553-0377, www.moodys.com 
• Standard & Poor’s
  212-438-2000, www.standardandpoors.com 

What If No One Will Insure You? 

Some individuals—usually the young and those with records of accidents or violations—find it difficult to locate a company that will agree to insure them. 

The only answer if you are one of these “high-risk” individuals is to shop. Try several of the insurance companies to see if they will cover you. As a last resort, you can sign up for insurance through MAIP, Massachusett’s “assigned risk” plan. MAIP is open to licensed drivers who can’t get coverage through the regular market, or who can’t get such coverage at rates that do not exceed those of MAIP. An agent contacts the plan on the driver’s behalf and drivers are then assigned to regular insurance companies. Each company is assigned a pro-rata share of policyholders according to its share of business in the state, and the policyholder pays the same premium no matter what company he or she is assigned to. 

Don’t assume that because you have been turned down by one or two companies that you must turn to the assigned risk plan. Companies’ standards for accepting new policyholders vary and change from time to time. To enhance your chances, remind an agent that you or members of your family have other business with a company—for instance, a homeowner’s policy or automobile policies for other drivers. On the other hand, don’t stop shopping even if you are accepted by one company, since you may still be able to find a better rate with another one. If you must join the assigned risk plan at a very high price, try to get other coverage after a year.