Massachusetts Attorney General

Are You Being Overcharged For Your Auto Insurance?

This past May the state attorney general announced four additional insurance companies to pay fines and compensate 10,000 auto insurance customers who were being charged auto premiums with inaccurate accident reports indicating they had not been at fault. The four companies to re-pay customers unfairly determined premiums are: Abrella Mutual, Norfolk & Dedham, United Service Automobile Association and Electric Insurance.

Some Massachusetts insurance companies were practicing outsourcing. When the auto insurance industry deregulated about two years ago the major insurers began using private databases to rate customers. There is a fear this outsourcing was careless in its record practices and drivers were being wrongly assigned at fault accidents and thus being charged higher premiums. These errors were found and investigated when a consumer complaint was sent to the Massachusetts Attorney General’s Office regarding overcharges based upon an inaccurate driving record.

Along the same lines as a credit report, your driving record in the RMV can contain mistakes by way of anything from a misspelling error and software glitches to poor handwriting on the original accident report. To protect yourself from paying higher premiums for accidents you were not involved in or determined not at fault with, it’s a good idea to review your driving record every do often.

A great way to do this is to ask your auto insurance agent what accidents, tickets, or violations are on record and affecting your rates. If you find you have one of these on your record that you were not involved in the first step is to seek out the source of the information. If the information was submitted by a company, contact the company and request a copy of the accident report they have on file. When you receive a copy of the accident report, compare it to the original police report. You will next need to file an appeal to either your current auto insurance carrier or the Massachusetts Court of Appeals.

Attorney General Coakley Proposes Additional Insurance Regulations

Martha Coakley, the Massachusetts Attorney General, has proposed new regulations that she believes will take force in sales and underwriting practices for auto insurers and agents across Massachusetts. The newly proposed regulations have been formed in response to a report published by Coakley’s office last year regarding the deregulated Massachusetts auto insurance market.

Coakley said in a statement, “We have seen some positive changes since the auto insurance marketplace was deregulated two years ago. However, there are still many improvements that should be made within the system to better protect consumers.” She believes the new proposals will increase the transparency of auto insurance to help consumers shop for better policies.

Two public hearings will be held this June on the proposed auto insurance regulations. These regulations include banning of the use of credit score to determine premiums and create rules for what statements auto insurance carriers can make while advertising prices.

Coakley’s proposal has been seen in a less than favorable light by some from the industry. Of those skeptical of the proposed regulations is Paul Tetraul, Northeast state affairs manager for the National Association of Mutual Insurance companies. Tetraul called the regulations unnecessary and ill-advised. He continued to explain:

“The underlying premises of the regulations, and the report issued by Attorney General Coakley’s office, are that consumers are not faring well under managed competition and that consumers are not protected adequately under existing regulations. Nothing could be further from the truth: the increased competition has resulted in most consumers saving money and having meaningful choices in the marketplace for the first time in decades.”

Read more about the proposed regulations at The Insurance Journal.

Liberty Mutual Settlement

Martha Coakley, Massachusetts Attorney General, has announced approximately three million dollars has already or will be returned to Massachusetts motorcyclists who were overcharged by Liberty Mutual. The insurance company is required by terms of a settlement reached in December to complete the process of issuing the refunds by May 1. Refunds range from amounts of $250 to $9,200 with an average refund of $334.

According to an article published in Legal Newsline, refunds of less than $250 will be distributed to 5,851 Massachusetts residents and 1,560 residents will receive refunds of between $250 and $499. Refunds of between $500-$999 will be sent to 1,136 residents while 740 will receive refunds of between $1,000-$9,200.

Liberty Mutual Customers who are eligible for a premium refund must have purchased insurance with either comprehensive or collission coverage for a motorcycle between January 1, 2009 and March 30, 2009. The Attorney General stated that Liberty Mutual has overcharged motorcycles during this time period.

Safety Insurance Settles with Attorney General

Safety Insurance Group announced yesterday January 14th 2010 it has reached an agreement with Attorney General Martha Coakley in the dispute over quoting motorcycle premiums. Safety’s settlement will backdate to certain types of coverages written on motorcycle insurance to Safety to January 1, 2002. If a customer has overpaid a premium with the new resolution since January 1, 2002 a refund will be made to the policy holder. If a customer paid a premium less than what would be determined by the standing agreement between Safety and the Attorney General additional premium will not be collected.

“Although we disagreed with the Attorney General on a number of points, we believe that after extensive discussions Safety has arrived at a resolution of the issue and an agreement with the Attorney General’s office that provides for the best interests of Safety’s policyholders. Safety had followed standard practices generally used by many Massachusetts insurance companies to calculate appropriate premiums for motorcycle coverages. It cooperated fully with the Attorney General’s review of those industry-wide practices and participated in the development of the new method.”

-Peter Rice, Safety’s outside council

Coakley alleges unfair rate increases for Massachusetts auto insurance customers

At the end of 2008, Massachusetts Attorney General Martha Coakley asked the Massachusetts state Division of Insurance to look at one insurance company, Premier (a subsidiary of Traveler’s Insurance), for alleged discrimination related to home ownsership.  Coakley’s office alleges that Premier’s new rating system unfairly increases rates for Massachusetts Auto Insurance consumers who do not own homes. As readers of this blog already know, Massachusetts insurance regulations prevent auto insurance companies from basing rates on income, homeownership, among other factors that could be construed as indicators for income.

Coakley critical of Mass DOI insurance rate comparison site

Massachusetts Attorney General Martha Coakley goes public with criticism of the Massachusetts Department of Insurance’s rate comparison site.  According to Coakley, the site provides Massachusetts Auto Insurance consumers with inaccurate rates.  It’s very important to note, however, that Coakley is not critical of comparison sites in general, but of the rates that the DOI displays.

‘The Web site as it is currently maintained is not only not helpful, it’s misleading,’ Coakley said at a news conference on the day the state switched to a system in which auto insurers, rather than the regulators, set rates for the first time in three decades.

The site advises consumers actual quotes from insurers ‘may differ significantly’ from the samples. Coakley said those warnings don’t make up for the fact that the sample quotes frequently don’t reflect the rate an insurer would actually offer an individual.

Thankfully, there are other additional comparison sites that area available for consumers to use for Massachusetts Auto Insurance purchases.

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