The Most Expensive Auto Insurance Rates in Central Massachusetts

Monday, June 30, 2014

Nicholas Handy, GoLocalWorcester Contributor

No city or town in Central Massachusetts has higher automotive insurance premiums than Worcester. Not only does auto insurance cost more, but Worcester's rates are far above the rest of the communities in the area.

But how is it that insurance rates can vary from city to city within a state? According to experts within the automotive insurance industry in Central Massachusetts, high traffic areas, driving records within each city, population density, how many claims are filed throughout the year, and crime, are just a few of the factors that are taken into account when determining insurance pricing for a city.

“I think that even things like the effects of law enforcement could be taken into account,” said Ken Eddy, the Vice President of Sales at Insurance Marketing Agencies in Worcester. “In cities like Holden, where I live, police are seen as much more diligent, potentially leading to fewer accidents because drivers are more aware of their actions.”

Methodology

In determining which cities in Central Massachusetts have the highest insurance premiums, GoLocal used the Auto Insurance Premium Comparison tool from the Massachusetts Office of Consumer Affairs and Business Regulation website to create a defined set of criteria to create a driver profile. All insurance premiums reflect rates effective January 1, 2014.

The driver -- a single vehicle, single operator, who has been licensed for 14 years – owns a 2008 Honda Civic LX. The driver in question is currently licensed in Massachusetts and has not only been with their insurance company for three years, but hasn’t had an accident in the past five. The driver commutes to work and drove 15,000 miles in the past year.

In terms of coverage, the criteria states that the vehicle operator opts for relatively low levels of coverage, with $20,000/$40,000 for bodily injury, uninsured motorist and underinsured motorist coverage limits, as well as $25,000 worth of coverage for property damage. The driver has also declined both collision and comprehensive coverage.

The Results

According to the driver profile created above, the highest a vehicle operator would pay for an automobile insurance premium in Worcester would be $997 per year, $282 over Central Massachusetts’ average insurance premium of about $715. Worcester ranks almost $400 higher than the lowest insurance premiums in the area, Templeton, whose highest insurance premiums are $602.

“For a place like Worcester, factors like population definitely play a role,” said Cheryl Hooper, manager at Protector Insurance Group. “The more people you have, the more of a risk for an accident. Higher populations also mean more congested areas, which could lead to more accidents.

Most, if not all, experts in Central Mass. viewed Worcester’s insurance premiums as the highest in the area, citing many factors. With that being said, some felt as though it was unfair for cities with higher populations to have higher insurance rates due to the amount of out-of-city traffic that flows through them daily.

“Smaller rural towns have smaller populations, but also less traffic,” said Eddy. “Sometimes it’s unfair when you think about it; how many of these accidents in Worcester are actually Worcester residents?”

Above Average Insurance Premiums Statewide

And while Worcester ranks highest in Central Massachusetts in terms of automotive insurance rates, Massachusetts as a whole has some of the higher insurance premiums nationwide.

According to data gathered by insure.com, Massachusetts ranks as the 16th highest state in the nation (including Washington D.C.) with an average automotive insurance premium of $1,604 for a 2014 model year vehicle, $101 over the national average of $1,503. Michigan ranks as the state with the highest insurance premium for a 2014 model year car at $2,551, while Ohio ranks as the lowest state at $926.

“[In Massachusetts,] you are dealing with a higher cost of labor than in other states,” said Richard Wackell, an insurance broker in Worcester. “These higher costs certainly affect the price of automotive insurance.”

Compared against other New England states, Massachusetts ranks third with their average automotive insurance rates. Rhode Island has the highest average insurance premiums for a 2104 year model car at $2,020 (ranks 5th nationwide) and Maine ranks 50th at $964. Connecticut also ranks toward the top of the list at 13th, while Vermont (43rd) and New Hampshire (49th) rank toward the bottom of the pack.

Changes to Automotive Insurance in Massachusetts

In April of 2008, the Division of Insurance made changes to how automotive insurance rates in Massachusetts were determined. Instead of relying on a fixed and established system insurance rates were dictated by the state and a fixed set of criteria, the Department of Insurance turned to a more competitive system.

This more competitive system has allowed for individual companies to create their own credits and surcharges to apply to insurance policies, creating more options for consumers. The Division of Insurance has noticed that changing to a more competitive system has benefited the insurance market as 15 new insurance companies have made their way to Massachusetts, almost doubling the number of companies that provide personal automobile insurance within the state to 34.

Although the Department of Insurance is looking to more ways to lower the automotive insurance rates in the state – for example, they are looking into ways to modernize the vehicle repair process within the state – many in the state are happy to see that the rates have been lowered.

“I can remember when Massachusetts used to rank much higher nationwide,” said Wackell. “Automotive insurance used to be managed by the state. We now have managed competition, allowing for each agency to set their pricing criteria. Because of competition, Massachusetts has seen a decrease in insurance rates. Companies can now personalize their rates based on their loss history, which can be beneficial to customers.”

Related Slideshow: 2014 Auto Insurance Rates in Central MA

Using a defined set of criteria, GoLocal utilized the Auto Insurance Premium Comparison tool from the Massachusetts Office of Consumer Affairs and Business Regulation to compile and rank the cities and towns of Central Massachusetts with the highest auto insurance premiums - lowest to highest.

The Criteria

Vehicle: 2008 Honda Civic LX

Policy: Single Vehicle, Single Operator Licensed 14 Years

Driving Record/Behaviors:

Driver Licensed in Massachusetts: Yes
Date of last accident or traffic violation: 5 years ago
Days lapse in coverage during the previous 3 years: None
Commutes to work: Yes
Annual miles vehicle driven in past year: 15,000
Years at current residence: 2
Years with current agent: 3
Years with current company: 2
Discrepancies on Application: 0
Subscriber to a Roadside Assitance Organization: No
Policy Eligible for a Group Discount: No
Premium paid in full at inception: No
Companion insurance products purchased: None

Coverage:

$20,000/$40,000 Bodily Injury Liability
$20,000/$40,000 Uninsured Motorists
$20,000/$40,000 Underinsured Motorist
$25,000 Property Damage Liability
$8,000 Personal Injury Protection ($0 deductible)

The Most Expensive Auto Insurance Rates in Central Massachusetts

Related Slideshow: 2014 Auto Insurance Rates in Central MA

71. Templeton

70. Upton

69. New Braintree

68. Millville

67. Hubbardston

66. Holland

65. West Boylston

64. Ashby

63. Westminster

62. Lunenburg

61. Townsend

60. Northborough

59. Orange

58.East Brookfield

57. Barre

56. Warren

55. Ware

54. Winchendon

53. Petersham

52. Sterling

51. Brimfield

50. Ashburnham

49. North Brookfield

48. Shirley

47. Brookfield

46. Uxbridge

45. Northbridge

44. Gardner

43. Ayer

42. Athol

41. Sturbridge

40. Topsfield

39. Charlton

38. Sutton

37. Hopkinton

36. Oakham

35. Hudson

34. Douglas

33. Harvard

32. West Brookfield

31. Paxton

30. Boylston

29. Bolton

28. Dudley

27. Palmer

26. Royalston

25. Oxford

24. Westborough

23. Millbury

22. Hardwick

21. Milford

20. Marlborough

19. Leominster

18. Clinton

17. Auburn

16. Hopedale

15. Lancaster

14. Southbridge

13. Rutland

12. Fitchburg

11. Princeton

10. Holden

9. Leicester

8. Mendon

7. Southborough

6. Webster

5. Spencer

4. Blackstone

3. Grafton

2. Shrewsbury

1. Worcester

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