State Attorney General Martha Coakley announced settlement agreements with Safety Insurance Company, Liberty Mutual Insurance Company and Quincy Mutual Fire Insurance Company over allegations the companies overcharged customers.
The three companies were allegedly using incorrect motorcycle values to calculate insurance premiums. Insurers are supposed to use current book values to calculate collision and comprehensive premiums but the three companies allegedly used values that were above book value.
Coakley cited an example of a 1999 Harley-Davidson Road King Classic being given a value of $20,000 each year between 2003 and 2008. The Road King Classic’s book value was actually significantly less, listing at under $12,000 in 2008.
Under the settlement agreement, the three companies will return $11.1 million to consumers, including 6% interest. Average refunds are expected to be $300 with some customers receiving thousands of dollars.
“We are pleased that Liberty, Quincy and Safety cooperated with our investigation and worked closely with our office to reach settlements that return the alleged overcharges to affected consumers,” says Coakley. “However, it remains troubling that these overcharges occurred, and these cases certainly underscore the importance of transparency in auto insurance rating.
“Both consumers and regulators need to have access to information showing how premiums are to be calculated so that consumers can be protected and are not overcharged,” Coakley says.
To qualify for a refund, customers must have bought motorcycle insurance from Safety, Liberty or Quincy with collision or comprehensive options between 2002 and the present.
The Massachusetts Motorcycle Association (MMA) is leading an effort to make sure all entitled motorcyclists receive their refunds.
“The AGO (Attorney General’s Office) has reached out to the motorcycling community, through the MMA, out of concern that the insurance companies might not be able to identify and locate the riders,” says Dave Condon, MMA chair. “All riders are encouraged to contact the MMA directly for assistance in expediting your refund.”
Massachusetts motorcyclists who believe they qualify for a refund are urged to send their contact information by email to [email protected], or by regular mail to MMA, Attn: MA AGO Insurance Settlement, P.O. Box 3789, Brimfield, MA 01010.
The AGO has also established telephone hotlines with the three companies: Liberty (800) 569-5411, Quincy (800) 899-1116, and Safety (877) 951-6416.
