BOSTON (AFX) - This year's waning days have brought disappointing news for one-third of the state's drivers: They won't see a change in their auto insurance premiums next year, despite a newly approved rate cut of nearly 12 percent that kicks in for most drivers in 2007.
About 1.3 million of the state's 4 million drivers won't see the unusually large reduction next year because of a change lawmakers made two years ago to push back the effective date for annual rate changes from Jan. 1 to April 1, starting in 2007.
The state is switching to an April-to-March annual rate cycle to give insurers time to calculate bills based on rate formulas set by the state insurance commissioner each December.
Consumer advocates and insurance industry officials agree lawmakers intended to simplify complicated year-to-year billing adjustments, rather than hurt certain policyholders.
But next year, the move will temporarily hurt drivers whose policies come up for annual renewal from January through March. Those drivers won't see the lower rate kick in until they renew in early 2008, while other drivers with renewals from April through December will win a rate cut starting in April 2007.
Although the January-March period covers one-quarter of the year, about a third of the state's drivers renew their policies during those three months -- a legacy of the fact that, years ago, all policies came up for renewal on Jan. 1 in Massachusetts, said Daniel Johnston, president of the Automobile Insurers Bureau of America.
Since Insurance Commissioner Julianne Bowler's Dec. 15 announcement of her 2007 rate decision, the state Division of Insurance has received about two-dozen complaints from consumers with January-to-March policy renewals, spokeswoman Brenda Doyle said.
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