The spring edition of USAA Magazine arrived in the mail yesterday. Most of the information is extremely basic fundamentals such as “make your coffee at home to save money.” I seriously doubted I’d find anything worthwhile, but on magic page #33, there was a great article that caught my attention.
The focus on the article was the cost of regulating auto insurance. In New York, one of the highest regulated states, the insurance department budget was $179 million. In Illinois, one of the least regulated, it was $18 million. Despite having the same big city (New York vs. Chicago) and rural areas, that difference is huge. This leads to each NY driver paying about $444 more for the same coverage.
Lastly the article brings up Massachusetts. I had been paying for Massachusetts auto insurance for years. The Massachusetts regulators make it so difficult for insurers to make a profit that many don’t even try. Sometimes when I’m really bored, I call up Geico to ask if they can save me money in 15 minutes. Of course they can’t because the insurance is standardized across the state, yet it doesn’t stop them from making the claim four times a day when I’m watching TV.