2006 CAR rate proposal
Posted Tuesday, November 15, 2005
15 November 2005 TO: All Concerned Livery Operations RE: Commercial Rate Classification, The New England Livery Association (N.E.L.A.), a private livery trade association representing over 200 limousine businesses in Massachusetts and New England, has worked with Commonwealth Automobile Reinsurers (C.A.R.) and the Division of Insurance for over ten years to address concerns regarding proper risk management, appropriate rating, and correct premium for vehicles of the private livery commercial auto transportation industry.   Over the past several years, NELA has been able to stabilize assigned risk commercial auto insurance, but it appears vehicle garaging is being changed to a higher rated area (especially Boston) for travel to and from Logan Airport.  This change in garage classification with little operational change is having significant negative economic impact on all commercial insured in the assigned risk category.  A significant factor in the determination of commercial insurance premium is the correct determination of a rating territory.  Over the past several years many livery operations to include several NELA members based outside of Boston have experienced a change in their insurance garaging to Boston and other higher rated territories with a significant increase in insurance premium based on limited travel to these areas.   NELA contacted C. A. R. on this issue and was advised the current insurance rating criteria has not changed the past ten years, but that their assigned risk insurance carriers are currently enforcing the risk guideline to move insured commercial passenger carriers into a higher rated garaging rating when greater than 20% of their business is in that area.  For example, a livery business that is located in a suburban town of Boston transporting passengers for hire from Logan Airport to another suburban area areas is having their insurance garaging changed to Boston with a corresponding increase in premium based solely picking up passengers at Logan Airport, a minimal portion of the business travel.   To date many insured are being sent significant premium increases based on a change in garaging with little recourse for rating review.  NELA opposes the current change in garaging based on this criteria, and plans to appeal to C. A. R. and ultimately the Massachusetts Division of Insurance to have all assigned risk insured correctly garaged rated.  In order to do so NELA will need specific examples of private livery companies’ change to a higher garage rating based on limited travel to a higher rated area.   If you are aware of a specific example of the above, contact NELA directly.  We will keep all requested information confidential.  We will need at least six specific examples of this change in garaging practice to be able to present a “Class Action” argument to have the garage rating process correct.  Do not hesitate to contact me if you have any question on this matter. Sincerely, Lawrence Willwerth

Chairman, NELA Insurance Committee


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