Insurance Gerrymander

With automobile production far outstripping road building, the states have almost uniformly recognized the obligation they have to protect their citizens from traffic hazards. Compulsory liability insurance is a partial answer, but in many cases it does not go far enough. In Massachusetts, the defects in the present program are obvious: no provision is made for a driver's accident record in computing his premiums, and rates are decided individually for each locality, instead of making uniform charges throughout the state.

Massachusetts has recently revised its insurance laws, and in 1956, the first of these defects will be remedied, with rates based directly on a person's past driving record. But the new law does not remove the zone system. Figured on the basis of statistical records of accidents, present insurance schedules require a Boston resident to pay five times more than, say, a resident of Amherst. Fire insurance can be based on the relative danger of a community, but there are too many other variables connected with automobile driving to calculate rates on a zone system. For example, a businessman who races into Boston every day from surburban Weston runs a far greater accident risk than a Boston school teacher who may drive her car only a few blocks per week. Yet the businessman pays rates that are much lower.

More important, a compulsory insurance system by its very nature should have the same basic rate for every citizen. Zoned rates are not objectionable when insurance is voluntary, for there is no compulsion to buy. But when made compulsory, it places an unfair burden upon certain citizens. These people are, in effect, being forced to pay more than others for the use of roads that are freely open to everyone.

Since the new insurance act does not take effect until 1956, the state can erase the last fault in the existing system by removing the zoned charges. Rates should be figured from the accident record of the state as a whole, and not for individual localities. Massachusetts was a pioneer when it adopted compulsory liability insurance in the twenties. Now, by amending the new laws, the state can have a model program.