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Auto insurance reform has been a boon for consumers

I take issue with Deirdre Fernandes’s analysis of the complex issue of reforming the auto insurance market in Massachusetts in her article “Auto rates bounce back up” (Page A1, July 28). Year-over-year comparisons of auto insurance premiums do not provide a sound foundation for commentary about rate levels or the general health of the insurance market.

The 2012 average Massachusetts auto insurance premium per car was 4 percent lower than it was in 2007 and 15 percent lower than it was in 2005. There are few annual expenditures in any household budget in Massachusetts that were lower in 2012 than in 2007.

The introduction of 15 new companies to a previously dysfunctional auto market, and the new products and coverage options they offer, have changed consumer behavior dramatically.

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A competitive market has enhanced consumer buying power, and many shoppers have responded by raising their coverage limits or buying newly available, innovative products, such as accident forgiveness and roadside assistance, to protect themselves and their families.

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This increased competition has also kept downward pressure on company profits. In the five years prior to 2012, auto insurers in Massachusetts reported virtually zero profit from underwriting, the lowest of any New England state during that same period.

Managed competition is a win for consumers and the many small businesses that provide services both before and after an auto accident. The improvements to the auto insurance market brought about by the Patrick administration have saved Massachusetts drivers millions of dollars and deserve a more thoughtful representation.

Joseph G. Murphy

Commissioner of Insurance

Boston