Auto insurance rates, which tumbled after Massachusetts opened the state to more competition four years ago, are marching steadily upward again.
Many of the state’s largest auto insurers have raised rates in each of the past two years, citing the need to keep pace with the rising cost of claims for car accidents, theft, and injuries.
In addition, some companies say they could not make enough money after they dropped rates in 2008 to compete with rival insurers or to gain market share.
Quincy Mutual, for instance, raised rates by 7.5 percent last month on top of a 5.6 percent increase last year after initially cutting rates by 10 percent in 2008. Overall, its rates are 3.3 percent higher than four years ago, when the state deregulated the auto insurance industry to spur more competition.
“It’s the nature of our business,’’ said the Quincy company’s executive vice president, Kevin Meskell. “People still crash into each other and people still go to the hospital and the associated costs with those have not been decreasing.’’
Overall, major insurers have raised rates by a median of 4.3 percent so far this year after a median increase of 4.5 percent last year, outpacing the overall rate of inflation, according to a Globe analysis of data collected by the Massachusetts Association of Insurance Agents, a trade group.
Inflation rose 2.7 percent in the Boston area last year, according to the US Labor Department.
Rates could increase further this year, because insurers sometimes raise them multiple times during the course of a year. The increases could also hit some customers harder than others, depending on driving history, where they live, and other factors, agents said.
Rates charged by most major insurers are higher than they were prior to deregulation four years ago, according to Massachusetts Attorney General Martha Coakley’s office. Coakley has filed objections with state insurance regulators to the “widespread increases’’ in auto rates.
Her office found that Travelers (which also does business as Premier) has raised rates by more than 30 percent since January 2009, while Liberty Mutual and Plymouth Rock have raised rates by 18 percent. Commerce, the state’s largest auto insurer, and Progressive, a newer player in the market, have each raised rates by 16 percent.
The rate increases are averages, so some customers could see their rates go up even more sharply, while others might not see their bills increase at all.
In a letter to Insurance Commissioner Joseph G. Murphy last month, Coakley’s office said it was concerned that the Division of Insurance was approving rate increases without forcing insurers to fully explain and justify them.
“The substantial increase in rates over the past two years is troubling,’’ wrote Glenn Kaplan, an assistant attorney general. “But we are also concerned about the review of these rate increases, both from a technical and process perspective.’’
State insurance regulators, however, said Monday that they routinely raise objections and concerns about rate requests, often prompting insurers to reduce their proposed rates.
“We don’t issue a press release when that happens and we don’t write to the attorney general’s office to tell them we are doing our job,’’ said Barbara Anthony, undersecretary of the Office of Consumer Affairs and Business Regulation, which oversees the Division of Insurance.
The insurance division can reject a rate increase only if it is unreasonable or excessive, Anthony noted.
“We are not a socialist regime,’’ Anthony said. “We have competition. Some people’s rates may go up and some people’s may go down. It’s the way competition works.’’
The rate increases could reignite debate over the way the state regulates auto insurance. Historically, the state set standard rates for every carrier, so rates differed little from company to company.
But starting in 2008, Governor Deval Patrick’s administration gave insurers more freedom to set prices - a change called managed competition - in an effort give consumers more options and lower premiums.
Since then, more than a dozen additional insurers have entered the Massachusetts market, including industry giants such as
Overall, auto insurance premiums fell by an average of 12.7 percent from 2007 to 2009, the steepest drop in the country, according to a recent report by the National Association of Insurance Commissioners. That translated into average savings of $133.80 per policy.
More important, state insurance regulators said, customers have wider choices because deregulation left companies free to offer different prices and products.
“Prior to managed competition, buying your auto insurance in Massachusetts was like when Henry Ford unveiled the Model T,’’ said Murphy, the insurance commissioner. “You could have any color you wanted as long as it was black.’’
Industry groups echoed Murphy.
“We believe that managed competition has been strongly helpful to the motoring public in Massachusetts because it has reduced the cost of insurance for good drivers and dramatically improved consumer choice in products and carriers,’’ said James T. Harrington, executive director of the Massachusetts Insurance Federation, which represents most of the state’s auto insurers.
But some of the price reductions have been ephemeral. Industry executives say insurers have started ratcheting up rates to pay for the cost of claims or because they found they could not turn a profit at the lower rates.
“We knew at some point that the rates would go back up again,’’ said Ray Gallant, an insurance agent in Acton who is chairman of the Massachusetts Association of Independent Agents trade group, which represents agents. “They weren’t going to make any money’’ if they kept rates at the lower levels.
Insurance agents and regulators say customers can still take steps to save money, including shopping for a less expensive carrier, raising the amount of their deductibles, or buying home and auto insurance policies from the same company to gain discounts. Customers with older cars may consider dropping comprehensive or collision coverage on those vehicles.
Agents add that the biggest factor in determining prices is a driver’s history of accidents and moving violations. A Sherborn insurance agent, Bob Carreiro, offered this advice: “Drive carefully.’’