The Safe Drive Insurance Plan (SDIP) is a point-based system that, in theory, rewards good drivers by lowering their insurance rates while increasing rates for unsafe drivers. The Plan sets the specific credits and surcharges that an insurance company may apply to their client’s premium. Drivers accumulate points on record, directly reflecting on their insurance premium costs.

Throughout the US, implementation of the plan varies from state to state. Out of the 50 states, 11 don’t even have a SDIP in place. Massachusetts has the harshest plan in the whole country. The RMV keeps the points on the driver’s record for 6 years. Every other participating state, with the exception of Wisconsin (5 years), keep the points for 3 years or less.

Is the SDIP working as intended? Is it bringing the cost of car insurance down for better drivers? Who are the people actually benefitting from this plan?

Let’s take a look on a state-by-state comparison of the average insurance cost per month (link below):

State-by-state Comparison

Massachusetts ranked way below 35 other states, which offer lower average insurance cost. Among these 35 states, 9 states don’t have a SDIP implemented. 70% of the country pays, in average, cheaper car insurance premiums than Massachusetts residents, despite the so-called rewards plan. In fact, most of the states that don't even have a point-based system in place, offer lower average cost than Massachusetts.

Is the harsher penalty in MA (6 years), proportionately translating to even lower premiums for good drivers, in comparison to states with shorter term penalties?

The data shows that 26 states where points remain on record for 3 years or less, have lower average insurance cost than Massachusetts.

Although the SDIP hasn’t been exactly beneficial for drivers, Insurance companies thrive.

Unlike other industries, where you make payments in exchange for goods or services, a policy premium is something you just pay, and in fact, hope to get nothing in return - getting something in return also means you've been in an accident, and nobody wants that to happen. Insurance works somewhat like a "pool", with everyone just contributing. Whenever the worst happens, accident-related expenses are covered by funds from the "pool".

However, Insurance companies are for-profit businesses. Part of those funds  goes to operational costs, and the rest is pure profit. Naturally, Insurers are eager to collect. Unfortunately, it is up to them to determine fault in an accident, based on their interpretation of the state’s definition of negligence. Their determination is, indeed, often arbitrary. 

This explains the existence of the Board of Appeal at The Division of Insurance (a governmental agency). Consumers who believe they have been victimized by unfair business practices can file a Request for Appeal ($50 dollars filing fee), and possibly, have the insurance company ordered to remove the points from the driver’s record. Currently, the average wait time for an appeal hearing to be scheduled is seven months. They have a lot on their plate!

Aside from actual accidents, certain traffic tickets also lead to insurance cost hikes. Speeding, Improper turns and failure to stop/yield at Intersections, in example, are incidents that can get you a traffic ticket. And If you think you’re as good as new after paying the fine, think again. These are Surchargeable Incidents that result in 2 points on your driver’s record. You will be also penalized paying more in insurance  for 6 years, if you live in Massachusetts.

In reality, MA SDIP  in its current form allows for questionable situations. In example, someone is driving his/her parent’s car. He/she gets a traffic violation ticket. If he/she doesn’t have a vehicle registered under their name, the parent’s record will be tainted with 2 points, for 6 years. It’s not unheard of MA residents getting in a dire situation even though they did little or nothing wrong.

It doesn’t necessarily take a terrible driver to build up points that lead to a financial burden. It only takes you, in example, a wrong GPS direction, in the presence of a police officer (Improper turn violation) to already get you started.

I have points on my record. I own a car that is worth $13800.00. I’m currently being charged an annual premium of $5916.00, which is 43% of the vehicle’s value as of today. In 6 years, it will be $35.496.00 spent in car insurance. That translates to 2.57 times the current value of my vehicle, which will depreciate every year over the course of the upcoming 6 years. My Insurance, though, will stay the same. Once again, by paying this much in car insurance, I will be only contributing to the aforementioned "pool", getting absolutely nothing in exchange for that sum. Most likely, if I end up using my insurance again (A.K.A, having them paying for something - God Forbid!) new surcharges may incur. I personally call this “Government Approved Extortion”.

Please help me ending this by demanding a revision in MA SDIP, and reduction from 6 years to a maximum of 2 years of point keeping in the state of Massachusetts.

Thank you.

Sources:

https://amp.businessinsider.com/average-cost-car-insurance-in-every-state-ranked-2018-3

https://www.mass.gov/service-details/safe-driver-insurance-plan-sdip

https://www.mass.gov/orgs/division-of-insurance

https://www.mass.gov/info-details/surchargeable-incidents