Points of Interest - Changes to the Safe Driver Insurance Plan Aren't a Ticket to Savings
December 17, 2006
Robert S. Murphy, Jr., Esquire
You may not have noticed it when you received your new auto insurance policy this year, but significant changes have occurred to the Safe Driver Insurance Plan for 2006.
Effective January 1, 2006, Massachusetts switched from a step system to a points system. Under the new plan, accidents and convictions of traffic violations will be used by insurance companies to calculate a surcharge or discount factor to be applied to the policy premium when a new policy is initially written and at each policy renewal. In this new world of an insurance points system, it is important to consult with insurance and legal professionals when considering whether to contest that next ticket.
Under the new Plan, there is a range of surcharges applicable to a points rating of 0 to 45 points. A major moving violation such as an Operating Under the Influence charge will garner you 5 points. A major accident claim, which is defined as a claim with a payment of more than $2,000.00 exclusive of any deductible under collision, property damage or bodily injury, will net you 4 points. A minor accident, which is defined as claims with a payment of more than $500.00 and up to $2,000.00 exclusive of any deductible, is assessed at 3 points. A minor moving violation such as speeding, failure to yield or a stop sign violation carries with it a 2 point penalty.
If the first incident on a driver’s record is a minor moving violation, no points will be assessed for that violation. Points are calculated based on one’s driving record and are then used to determine surcharges. Experienced drivers, defined as those with 6 or more years of driving experience, are charged 15% per point for accidents or moving violations. Inexperienced drivers will be charged 7.5% per point for accidents and moving violations. The percentage difference reflects the fact that inexperienced drivers are already paying a higher premium to start.
In addition to the punishment aspect of awarding points, experienced operators are eligible for discounts based on the absence of surchargeable events. The “Excellent Driver Discount Plus” provides for a 17% discount off of bodily injury liability, personal injury protection, damage to property of others and collision premiums if the driver has no accidents or violations for the past six years. If a driver has no accidents or violations in the five years preceding the effective date of the policy, that driver will earn an “Excellent Driver Discount” which provides a 7% reduction from published rates for the above-listed coverages. Additionally, the “Excellent Driver Discount” is available to a driver with 1 surchargeable incident in the past five years provided it was a non-criminal traffic violation and is more than three years old. The “Excellent Driver Discount” is also available to inexperienced drivers who otherwise meet the criteria.
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BusinessWest
November 13, 2006
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