Massachusetts Insurance Commissioner Julie M. Bowler has approved changes in the way drivers receive discounts and surcharges to their auto insurance policies based on their driving history beginning in 2006.
The revised Safe Driver Insurance Plan will provide discounts for the state’s best drivers and offer incentives for bad drivers to improve their driving records and realize lower rates, according to Bowler. Scheduled to take effect January 1, 2006, the revised SDIP more closely resembles how insurers evaluate driving records in most other states.
“This is another big step in the right direction for our drivers and our auto insurance system. The SDIP changes will reward good drivers and demonstrate to bad drivers how improved driving can reduce their higher rates in three years time instead of six,” said Bowler.
The SDIP changes are intended to encourage safe driving through financial incentives, improve consumer understanding of the impact that driving records have on insurance premiums and make rates more reflective of actual driving records without any changes to existing territorial subsidies.
Bowler’s approval of these changes, which were proposed by the State Rating Bureau, allows time for issuing required regulation revisions and provides auto insurers with time to implement the changes. The 2006 SDIP will be finalized following consideration of the values for surcharges and discounts which will be filed with the Division of Insurance as part of the upcoming 2006 private passenger auto insurance rate case.
How the revised SDIP will work beginning in 2006:
* The current SDIP steps of 9 to 35 will be replaced with a point system in which drivers will be assigned points based on at-fault accidents and moving violations incurred in the last five years of driving experience.
* Point values for minor and major traffic law violations and minor and major at-fault accidents will remain unchanged.
* The “Clean-in-Three” provision approved in 2005 for experienced drivers with only one at-fault accident or moving violation in the past five years will be expanded in 2006 to include all drivers who have been licensed for at least three years. This reduces the points assigned for surchargeable incidents when a driver has no more than three and all incidents are more than three years old.
* Drivers with five years of clean driving experience (formerly SDIP Step 10) will receive an “Excellent Driver Discount” and those with six or more years of clean driving experience (formerly SDIP Step 9) will receive an “Excellent Driver Plus Discount”.
* Bodily injury claims resulting from at-fault accidents will now be included as surchargeable incidents.
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