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City councilors to probe why the car-insurance rates are too damn high in some neighborhoods

City Council President Andrea Campbell (Dorchester) is calling for a public hearing to help figure out why Boston residents - and especially those who live in Roxbury, Dorchester and Hyde Park - pay so much more for car insurance.

In her formal request for a hearing, Campbell says Bostonians already pay some of the highest insurance rates in the country, and that people in areas with high concentrations of minority and low-income residents pay even more than other Boston residents, even if they have excellent driving records.

"It's a serious economic hardship," especially because many of those area overlap with areas poorly served by public transportation, she said. She said average premiums for experienced drivers in Roxbury is 204% of the statewide average, while Dorchester is at 188% and Hyde Park 153%.

In addition to calling in state insurance officials and representatives of insurance companies, Campbell said she wants any hearing to be a forum where residents can discuss the impact of high rates on them.

City Councilor Tim McCarthy (Hyde Park, Roslindale, Mattapan) agreed that something seems to be out of whack. He said he pays $4,500 a year to insure his family's three cars in Readville, even though the newest is now six years old, and that's just unfair when people just over the line in Dedham pay $1,700 for comparable coverage.

City Councilor Matt O'Malley (Jamaica Plain, Roslindale) chimed in with a personal anecdote about his father's house, which in the 1950s was deemed to be West Roxbury, then was given a Roslindale Zip code, before getting switched back to West Roxbury in 2007. During the Roslindale interregnum, he recalled, his father was able to get a substantial discount on his insurance by showing up at a broker's office with his deed, which showed the house was in "West Roxbury," even though it had a Roslindale Zip code.

"That's absurd and it shows how deeply flawed the system is," he said, adding he hopes that, in addition to looking at high rates in certain neighborhoods, the council also consider the issue of Boston residents who registered their cars on the Cape or in New Hampshire to try to beat the system - which he said unfairly burdens Bostonians who play by the rules.

Councilor Michael Flaherty (at large), rose to support the hearing request. "I just wanted to be the first to say 'Three-Car Tim," the councilor, who had earlier been dubbed Five-Car Flaherty after a discussion about neighborhood parking permits, said before asking to have his name added as a sponsor.

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Comments

My house was changed from WR to Rozzie in the early 80's. I pay more than my neighbor that parks in front of my house b/c his house, which is across the street, is WR. It's a bummer.

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Curious to hear what they're investigating, my understanding has always been that car insurance rates track property theft rates, and Boston has the highest in the state.

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The same driver will pay a higher premium in a different neighborhood because of the higher risk that insurers will have to pay a potential claim in that location for any or all of the following reasons:

1) higher frequency/probability of accidents in that location
2) higher frequency of fraudulent insurance claims in that location (a popular scam in collusion with storefront 'chiropractors' or 'physical therapists' who profit from the fraud)
3) higher frequency of uninsured or underinsured drivers in that location
4) higher frequency of auto theft or vandalism
5) higher frequency of claims filed in that location
6) higher total cost of claims filed in that location

Neighborhood groups can help address some of this by advocating for traffic calming efforts that reduce risk of accidents and crime watch efforts that reduce auto theft and vandalism.

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"I just wanted to be the first to say 'Three-Car Tim," the councilor, who had earlier been dubbed Five-Car Flaherty after a discussion about neighborhood parking permits

Will someone throw this idiot into the river or something?

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Voting closed 55

this a-hole will cruise to re-election based on name recognition because Boston voters are among the most ill-informed about their local elections, and the voter turnout is so terribly low for local elections.
If it were up to me he'd be in the bread line in December.
AH who am I kidding some ghoulish private sector firm would hire him as a consultant for six figures.

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About 20 years ago he also had hearings being he lives in Mattapan on DOT line.
What was found out is that DOT. Southie, Roxbury, Ctown, Eastie include the expressway and all the issues that go with it.
Of course car theft, accidents and many other things for the biggest part of the city don't help

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I would like to see some evidence that my neighborhood (Dorchester) has higher damage costs as compared to using actual driving records to determine rates.

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I don't think they use damage rates, AFAIK they use local crime rates. Car insurance is expensive in Springfield too.

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You can figure it out, high crime areas, more likely to get car stolen or damaged. larger population. And credit rating is factoreed in. Probably more likely to get hit by an uninsured driver. I know this seems like a racist formula. maybe even get hit by person without a license. Nah

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Credit rating is not used to determine auto insurance rates in MA.

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Credit is used for acceptability, but not rate, in MA. That said, that means lower rates from some premier companies are not accessible to those with poor credit.

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It gets figured out with records. Not by assumptions made by what you see on tv. Are insurance companies losing more money by insuring me and my neighbors, or are they unfairly increasing our rates. Where are the numbers?

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Doesn't mean those around you are.

If you live in say Dot, you car is more likely to be hit while parked on a street than say Westie. If someone hits you while parked and takes off, guess who's paying that claim, your insurance. That is a risk they price out in your policy.

Further, urban areas (all of Boston in comparison to suburbs) are charged more because of density. You are more likely to be in an accident on a densely populated motorway than some suburban road in Concord.

You driving record is only part of it. It it was the only factor someone driving a Honda Civic with a step 98 would be paying the same as someone driving a Ferrari with a step 98.

Also, rates are filed with the MA Insurance Board, the councilors look stupid here.

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Voting closed 31

They're not asking why is it higher, which us what you just answered.

They're asking why is it so much higher.

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If you "work" in a high density area and have your car on the road in that area shouldn't that be factored into your insurance rate? Our city streets are full of people that drive into the city and add to congestion/risk for accidents etc.

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Several years ago, I asked the Liberty Mutual representative what I could do to reduce my (ridiculously high) car insurance premiums, since I had a perfect driving record ever since getting my first licence--I live in Hyde Park--and she laughed uproariously and said "move three miles to Dedham!" If high density/traffic leads to more accidents, then the Back Bay/downtown areas would have the highest rates, what with a gazillion people driving in to work every day. Some of them must drive in from Dedham. Through Hyde Park. Increasing my insurance rates....

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Thanks, professor, but we'll take it from here. Thanks for stopping by.

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Many of the higher-rate neighborhoods have a history of insurance fraud -- from staged accidents to made-up injuries from fender benders. The costs of paying out for the fraudulent claims which go undetected or unprosecuted end up being reflected in insurance rates.

If you've got a lot of "physical therapy" offices and/or billboards from ambulance chasers urging you to sue, you're probably in a neighborhood where rates will be higher.

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Where is this data from?

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I'm not sure about now but The South Shore Plaza in Braintree was the #1 spot for stolen cars in the entire state for a long time. I guess folks that work there or frequently shop there should have their rates adjusted to the max.

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based on the "housing" of the stolen vehicle, not where it is found.

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They know these rates are determined by actuaries using large amount of collected data.

But lets scream racism, its the cause of everything in 2019.

This is going to go nowhere FAST.

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Rates are regulated, reviewed and approved by the state for most insurance, not just auto.

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I'm going to bet that there's a correlation between premiums charged for cars garaged in a specific location, and claims payouts on cars garaged in that location. Like, a really high, r=.9 kind of correlation.

Your premium in Mattapan is higher than the premium someone else pays 3 miles away in Dedham because the claims payout experience for cars garaged in Mattapan is higher than for cars garaged in Dedham. There are all sorts of socioeconomic factors involved, of course, but the underlying criterion is transparent, easy to measure, etc.

Now I'd be perfectly willing to listen to the argument that, although place of principal garaging is a clear and understandable criterion that is easy to measure, it might in fact not be the best or fairest way to set premiums, and there are all sorts of policy objectives that might be met by choosing different criteria to determine rates. But that's a different argument than the ones being made here.

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So should the prices, there is far less a threat of getting a car stollen car as technology has grown. Insurance companies get fat while everyone else starves on the streets.

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That new "technology" that has grown is expensive. It's a lot more $ to repair cars now, so collision rates have increased what theft rates have come down.

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In 2014 when I moved from Jamaica Plain to Dorchester, my auto insurance (Geico) went up 47%. Same car. Same drivers. And from street parking to a driveway. Needless to say, we switched insurers. However, that rate has since gone up 46% in 5 years (homeowners insurance has gone up 54% in the same time period, neither with any claims).

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I finally got private driveway parking when I moved to Mattapan and my insurance agent told me it changed nothing vs. parking on the street. How is that possible?

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I finally got private driveway parking when I moved to Mattapan and my insurance agent told me it changed nothing vs. parking on the street. How is that possible?

Probably because the data show that, on average, across large numbers of policies, parking your car in a driveway versus parking it on the street does not reduce the number or size of claims payouts.

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Tim McCarthy ...pays $4,500 a year to insure his family's three cars in Readville, even though the newest is now six years old

If his cars are 6+ years old, then it's likely they don't have backup cameras (thanks Obama!) or accident avoidance features. Collision coverage could be lower, but liability coverage should be higher.

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It’s a rigged system, always has, always will be.
If they can’t blame it on history, they will blame it on some other had to quantify statistic.
New people
Old people
New cars
Old cars
Number of cats in the neighborhood
Are they rich?
Hit them for all that you can!
Are they poor?
They have no choice and they have no voice!
Hit them for all you can!

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My guess is that the rationale that established these discriminatory rates no longer exists. Car theft, once an epidemic in the inner-city, has long gone "out of fashion" as the NY Times has written. Prior to the 1990s, just about any car could be stolen with a screwdriver. Some required no tools at all. Now, it is almost impossible for amateur thieves to start a car without the key, fob, code etc. Those who do are easily tracked with GPS. Car fires of all varieties seem to be way down also. I'm not sure about accident statistics but it would seem that increased inner-city congestion would mean lower speeds and less serious injuries/damage.

Keep in mind that insurance in MA is highly politicized. It wouldn't surprise me at all if Beacon Hill never bothered to look back at the reasons for discriminatory rates and whether they have been mostly eliminated. Why ruin a good thing (for the pols, lobbyists and insurance execs)?

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O-FISH-L being RATION-L?!

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It could be that you and he agree on this topic.

It happens. It doesn't mean either one of you is rational.

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Basically, they mug the driver then go to the address on their driver's license, and beep beep until you find the car. They also go into your house take the rest of your stuff (or worse).

It does happen a lot less often, but it happens.

PS change your locks asap, get someone to stay with you, and move your car somewhere inside until you can get those locks changed.

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East Boston/Charlestown were highest (and lumped together) due to preponderance of car theft

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*Anecdotally*
We just instituted permit parking on our street. Several residents were vocally against it (as we found out, it was because they register their cars out of state or outside the city to avoid our high rates). Since stickers went into effect, about half of our neighbors’ cars have disappeared to other non-permit streets. It’s stunning actually how fewer cars we have during the permit hours. I have to believe that some of the problem is that there is too small of a pool for the amount of claims because of this type of insurance fraud.

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You are talking about insurance companies here. They take money from everyone, pay out as little as possible, and build skyscrapers to rent out office space. No insurance company anywhere is losing money on anything. What we are talking about is shaving a number to be expressed in decimals of a percentage of their profits to save folks some money and ease their financial burdens. Anyone working on defrauding an insurance company is a god-damned hero and Commerce should consider itself blessed to have bootlickers like you out there.

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Love the title

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It's called redlining, except this time its the insurance industry doing it. CA passed an initiative petition to ban using zip codes to determine car insurance rates and the insurance industry ignored it. Can't remember where it went from there as the lobbyists for the industry would do anything to make sure that didn't become law. Imagine paying premiums only based on your driving record.

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I don't see how it's so difficult to comprehend that location of your vehicle matters just as much as driving record? Do you really feel that two cars owned by two people of the same age, experience, & driving record should cost exactly the same to insure in downtown Boston vs. say, Lincoln? What about Manhattan vs. Northern Maine?

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The formula is not transparent. And I am really surprised at the sheep that think it is stupid to question the insurance companies. And don't tell me the that the state sets the numbers. Do you really think they have a enough staff to research this independently?

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from Andrea Campbell, and I know the answer to why the rates are higher. People around here CANNOT DRIVE. I have been living in the neighborhood for lo these last 4 years and have personally witnessed more parked cars, houses, and mailboxes (the big USPS ones on the sidewalk) struck than in all my previous years (since 1999) in the Boston area, living in Allston, Southie, Brighton, Back Bay, Mission Hill, and Watertown, combined. When I moved to my current place from Watertown my car insurance more than doubled, and I have a clean driving record. About 6 months into living there someone crashed head on into my car parked in front of my house. A couple I know around the same time bought a house on a side street off of Gallivan Blvd close by, and their new car was totaled while parked in front of their house. Insurance didn't cover it all and they had to continue making payments on a heap of twisted metal in a junkyard.
It's mayhem for cars in these neighborhoods. I had an easier time (but probably more parking tickets) in Back Bay.

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