Massachusetts Attorney General Martha Coakley claims insurers have overcharged commercial auto customers by $1 billion over the last seven years and has asked the state’s insurance commissioner to slash premiums for the coverage.
Coakley said her office arrived at the $1 billion figure after reviewing information from the National Association of Insurance Commissioners (NAIC) and Automobile Insurers Bureau (AIB). Coakley claims businesses overpaid by $150 million per year between 2004 and 2010 — a total overcharge of about $1 billion dollars. During the same period, Coakley said rates were high by at least 21.6 percent.
“These inflated commercial auto premiums impact virtually every industry in Massachusetts – from manufacturing, trucking, and construction to sales and services,” Coakley said in her letter to Commissioner Joseph Murphy. “The added costs limit the ability of businesses to invest in Massachusetts and cost Massachusetts residents thousands of jobs. The problem is especially acute for small businesses, whose ability to create jobs is impaired by excessive rates.”
Massachusetts law allows the commissioner to reduce commercial automobile insurance premiums that are deemed excessive.