The Massachusetts auto insurance market got a big shake up this spring when companies became eligible to set their own managed rates. The Ohio-based insurance company Progressive has made headlines by selling over 10,000 policies in Massachusetts since they set up shop on May 1.Jeffrey Krasner, a business writer with the Boston Globe, reports on some of the reasons why Progressive may be getting so much attention. When customers contact them for a quote, they receive a comparison quote from three other major auto insurers in the state. What these comparisons don’t take into account, however, is any group discount the driver could be eligible for.
"Clearly, the rate from a competitor will be lower than what we quote you on the Web site," Cathy Wilton-Bransch, Progressive’s product manager for Massachusetts tells the Boston Globe.
Another practice that has drawn criticism is Progressive’s quoting of six-month policies. These may seem much cheaper to drivers who are familiar with 12-month policies, the only kind written in Massachusetts prior to Progressive’s arrival.
"If it isn't outright deception, there's certainly a misunderstanding of the quotes consumers are receiving," Doug Bailey, a spokesman for Arbella Insurance Group of Quincy remarks.
Other Bay Staters worry that Progressive has entered the market with low-priced policies hoping to attract a large customer base early on. Once the introductory period is over, some fear that rates could go up.
Wilton-Bransch, the brand manager, disagreed. "We definitely don't price where we give away insurance and lose money," she says. "We're priced where we need to be for the long term."
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--Bridget O'Sullivan
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