Baby, You Can Drive My Car, And Maybe I'll Insure You. Beep Beep Yeah

So many car insurance commercials on TV, so little relevance to Massachusetts drivers.

This is the only state in the country where insurance rates are set by a government panel, which has worked out well for some folks (bad drivers and insurers willing to play ball) and not so well for other folks (good drivers in bad neighborhoods, big-time out-of-town companies).

Now Insurance Commissioner Nonnie Burns wants to shake things up, proposing a limited shift in the system that will (according to her) give consumers better options and hopefully lower rates, while not shafting anyone who doesn't deserve it. Sounds good, right?

The theory is that insurance companies will be able to set their own rates, to a point, and under supervision by the Insurance Commission. What Burnes wants is a system that will ensure the rates are based on the customer's driving record and propensity to get in accidents. As opposed to credit score, education, golf handicap, favorite Pop-Tart flavor, and other irrelevancies that are used to set rates in other states.

There's also the matter of what's to be done about those drivers that insurance companies don't want to cover but have to. Currently, these people pick their own company and may get put in an "industry pool", which sounds ominous. Under the new proposal, these sad sacks would be assigned an insurer and lose their ability to choose, which is still better than losing their license.

Massachusetts deregulated insurance in 1977 and all hell broke loose, so they canceled the experiment after seven months. Changing the system is a delicate tightrope-walk with a ton of money at stake, so let's hope the Commission does the right thing and makes sure the money flows to the right people.

Image from the SCAN journal at Sydney's Macquarie University.