Massachusetts was a proper location for a primary attempt for auto insurance reform. Due to high accidental injury claim frequency and high average payments per claim, the state has been plagued for many years with expensive automobile coverage. Opinions differ as to the reasons this is the case, however it is assumed that the costs of Massachusetts auto insurance escalated as a result of obvious physical deficiencies .
Road systems are poorly designed, dangerous, and in some cases obsolete. Unpredictable Northeastern conditions make driving treacherous discounts on premiums about the best of highways. Massachusetts daily generates massive volumes of traffic, especially during winter, when most commuting happens in darkness. Superimposed upon unusually unsafe driving conditions is the insistence of Detroit to make overpowered and uncrashworthy automobiles unsuited to protect occupants from your dangers due to collisions even at low speeds. High insurance costs were also simply as a result of spotty police officers. The proportion of Massachusetts drivers in prison for moving traffic violations remained the lowest in the united states. The Massachusetts conviction rate was one-sixth those of the Pacific coast states for corresponding years through the late 1960’s.
Besides factors incidentally linked to insurance, the device of compulsory insurance that existed in Massachusetts read more since 1927 encouraged accidental injury claims. Massachusetts’ compulsory insurance liability law never was accompanied by a compulsory damage to property law. This meant that damage to property claims were frequently submitted disguised as personal injury statements to force away the possible absence of coverage to pay the repair bill for any damaged automobile. This practice was so common that, when insurance reform was being considered, the phe-nomenon of property damage claims filed as personal injury claims was known as an important rating factor by every report on Bay State insurance. As a result of rewards and low personal risk of filing such fictitious claims, this custom overlapped into cases that have been absolutely fraudulent.
Nevertheless the principal take into account the unusually high cost of car insurance in Massachusetts was a statute that handed towards the commissioner of insurance the power to set rates so long as he deemed them just, reasonable, adequate, and nondiscriminatory. Uniform rate-setting resulted in the reduction of any market-place competition among the insurers. By law, no insurance provider was able to sell compulsory auto insurance at rates below those set from the commissioner. This discouraged some of the better managed companies from operating in Massachusetts.
The system seemed to be frustrating and slow. In some counties it took three to four years to get a jury trial. Nor did the firms do anything whatsoever to expedite claim payment by efficient handling, complaining instead concerning the sheer volume. By the late 1960’s, it was apparent a drastic overhaul of automobile insurance was needed. It absolutely was out of this starting point that no-fault automobile insurance began its journey from abstract principle to political reality.
It began once the Keeton-O’Connell plan found the eye of Representative Michael Dukakis, who happened to be an early 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 that passage of Massachusetts no-fault was arrived. Within weeks, it had been filed by Dukakis within the Massachusetts Legislature and being considered by a joint legislative committee on auto insurance. Regardless of the fact the committee recommended against it, in August, 1967, the Keeton-O’Connell plan was brought to the ground of the Massachusetts House of Representatives, the low branch from the Massachusetts Leg-islature, for a vote. To the surprise of everyone, including Dukakis, the bill was passed by the home and delivered to the Massachusetts Senate for concurrence. Panic set in, and also the insurance industry and the bar, acting in concert, exerted their relation to the Senate, urging it to defeat the program.