Massachusetts was a proper place for a first attempt for car insurance reform. As a result of high personal injury claim frequency and high average payments per claim, their state may be plagued for years with expensive automobile coverage. Opinions differ as to why this is the situation, but it’s assumed the costs of Massachusetts automobile insurance escalated as a result of obvious physical deficiencies .
Road systems are poorly designed, dangerous, and in some cases obsolete. Unpredictable Colonial climate conditions make driving treacherous dui on the best of highways. Massachusetts daily generates massive volumes of traffic, especially during wintertime, when most commuting occurs in darkness. Superimposed upon unusually unsafe driving conditions is the insistence of Detroit to make overpowered and uncrashworthy automobiles unsuited to guard occupants from the dangers brought on by collisions even at low speeds. High insurance costs were also simply because 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 that of the Pacific coast states for corresponding years through the late 1960’s.
Besides factors incidentally associated with insurance, the machine of compulsory insurance that existed in Massachusetts here since 1927 encouraged personal injury claims. Massachusetts’ compulsory insurance liability law wasn’t accompanied by a compulsory damage to property law. This meant property damage claims were frequently submitted disguised as personal injury claims to protect against the possible deficiency of coverage to pay the repair bill for any damaged automobile. This practice am common that, when insurance reform was initially being considered, the phe-nomenon of damage to property claims filed as accidental injury claims was acknowledged as an important rating factor by every directory Bay State insurance. As a result of rewards and low personal chance of filing such fictitious claims, this custom overlapped into cases which were absolutely fraudulent.
Nevertheless the principal element in the unusually high cost of auto insurance in Massachusetts would be a statute that handed for the commissioner of insurance the ability setting rates provided that he deemed them just, reasonable, adequate, and nondiscriminatory. Uniform rate-setting triggered the removal of any market-place competition on the list of insurers. By law, no insurance carrier was allowed 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 device was also frustrating and slow. In certain counties it took three or four years to obtain a jury trial. Nor did the firms do just about anything to expedite claim payment by efficient handling, complaining instead about the sheer volume. Through the late 1960’s, it absolutely was apparent that a drastic overhaul of automobile insurance was needed. It was out of this starting point that no-fault automobile insurance began its journey from abstract principle to political reality.
It began when the Keeton-O’Connell plan found the interest of Representative Michael Dukakis, who were an old student of Robert Keeton at Harvard Law School. Dukakis arranged a gathering with Keeton to discuss the master plan; as well as the movement for your passage of Massachusetts no-fault was arrived. Within weeks, it was filed by Dukakis in the Massachusetts Legislature and being considered by a joint legislative committee on car insurance. Regardless of the fact the committee recommended against it, in August, 1967, the Keeton-O’Connell plan was brought to the ground from the Massachusetts House of Representatives, the reduced branch of the Massachusetts Leg-islature, for a vote. For the surprise of everyone, including Dukakis, the bill was went by your house and delivered to the Massachusetts Senate for concurrence. Panic occur, and also the insurance industry as well as the bar, acting in concert, exerted their influence on the Senate, urging it to defeat the plan.