This seems like a good time to remind agents that car dealers are not allowed to discuss insurance with their customers, according to MA Division of Insurance (DOI) Bulletin #2010-16 (“Involvement of Motor Vehicle Salespeople in the Solicitation, Negotiation or Sale of Motor Vehicle Insurance.”), which is still very much in effect. If you find out that your customer was approached about auto insurance while buying a vehicle at a dealership, you should report it to the DOI and MAIA as it may be a violation of MA law.
What Does the Law Say?
In Massachusetts, it is illegal to solicit, negotiate, or sell an insurance policy unless you are licensed by the DOI. The state defines these actions as follows:
- Soliciting is an attempt to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company;
- Selling is exchanging a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company; and
- Negotiation about insurance occurs if a person confers directly with or offers advice directly to a purchaser of a particular contract of insurance about its benefits, terms, or conditions, and either sells or obtains insurance for a purchaser from an insurance company.
What Does a Violation Look Like?
The DOI Bulletin lists several examples of statements and actions on the part of motor vehicle sales staff that would violate this law. These include:
- Telling a customer they can save money by using a particular insurance company
- Assisting the customer in obtaining insurance by using a dealership computer while the customer watches
- Allowing the customer to search for their own insurance on a dealership computer that is preset to a particular insurance company’s website
- Making vehicle financing contingent on the purchase of insurance from a particular company.
For details read the full DOI Bulletin:
How to File a Dealer Complaint
If you learn of a situation in which a dealer is recommending or encouraging customers to use a particular insurance company, and you believe it might be a violation, please report it to MAIA and to the Division of Insurance using the following links:
For questions, contact MAIA Member Relations Advocate Kathy Cormier at firstname.lastname@example.org or 800-742-6363.