Massachusetts was an appropriate place for an initial attempt for automobile insurance reform. Because of high injury claim frequency and high average payments per claim, hawaii may be plagued for a long time with expensive automobile coverage. Opinions differ why this was the case, however it is assumed the costs of Massachusetts car insurance escalated because of obvious physical deficiencies .
Road systems are poorly designed, dangerous, and in some cases obsolete. Unpredictable Northeastern conditions make driving treacherous instant quotes on the better of highways. Massachusetts daily generates massive volumes of traffic, especially during winter, when most commuting takes place in darkness. Superimposed upon unusually unsafe driving conditions will be the insistence of Detroit to create overpowered and uncrashworthy automobiles unsuited to protect occupants in the dangers brought on by collisions even at low speeds. High insurance costs were also in part as a result of spotty police officers. The proportion of Massachusetts drivers convicted of moving traffic violations remained the cheapest in the country. The Massachusetts conviction rate was one-sixth those of the Pacific coast states for corresponding years through the late 1960’s.
Apart from factors incidentally associated with insurance, the machine of compulsory insurance that existed in Massachusetts my advice since 1927 encouraged injury claims. Massachusetts’ compulsory insurance liability law wasn’t accompanied by a compulsory property damage law. This resulted in property damage claims were frequently submitted disguised as injury claims to control the possible absence of coverage to pay for the repair bill for a damaged automobile. This practice was common that, when insurance reform was initially being considered, the phe-nomenon of property damage claims filed as personal injury claims was acknowledged as an important rating factor by every report on Bay State insurance. Due to the rewards and low personal risk of filing such fictitious claims, this custom overlapped into cases that have been absolutely fraudulent.
However the principal take into account the unusually steeply-priced automobile insurance in Massachusetts would be a statute that handed to the commissioner of insurance the ability to create rates as long as he deemed them just, reasonable, adequate, and nondiscriminatory. Uniform rate-setting resulted in the elimination of any market-place competition one of the insurers. By law, no insurance provider was allowed to sell compulsory car insurance at rates below those set from the commissioner. This discouraged some of the better managed companies from operating in Massachusetts.
The machine was also frustrating and slow. In certain counties it took three or four years to get a jury trial. Nor did the companies do anything to expedite claim payment by efficient handling, complaining instead about the sheer volume. From the late 1960’s, it was apparent a drastic overhaul of car insurance was needed. It was from this place to start that no-fault auto insurance began its journey from abstract principle to political reality.
It began when the Keeton-O’Connell plan came to the eye of Representative Michael Dukakis, who happened to be a former student of Robert Keeton at Harvard Law School. Dukakis arranged a gathering with Keeton to talk about the master plan; as well as the movement for your passage of Massachusetts no-fault was under way. Within weeks, it was filed by Dukakis within the Massachusetts Legislature and being considered with a joint legislative committee on car insurance. Despite the truth that the committee recommended against it, in August, 1967, the Keeton-O’Connell plan was taken to the ground of the Massachusetts House of Representatives, the reduced branch from the Massachusetts Leg-islature, for any vote. Towards the surprise of everybody, including Dukakis, the bill was passed by your house and provided for the Massachusetts Senate for concurrence. Panic emerge, and the insurance industry and the bar, acting in concert, exerted their influence on the Senate, urging it to defeat the program.