Travelers, Fireman’s Fund and Electric Insurance are the latest insurers to reach a settlement with Massachusetts attorney general’s office over motorcycle insurance premiums. The three companies are accused of overcharging the state’s motorcycle owners and later this month, these insurers will be sending out refund checks to 14,149 motorcycle owners totaling $5.6 million.
These insurers have allegedly illegally overcharged their Massachusetts customers for years by using inflated and un-depreciated motorcycle values to calculate insurance premiums, according to officials. Attorney General Martha Coakley’s office reached similar settlements with 12 other insurers last year.
15 Insurers Have Settled with AG So Far
So far, 15 insurers have settled with the attorney general and have agreed to return nearly $40 million to Massachusetts consumers.
Under the terms of the Oct. 3 settlements, Premier Insurance Co. of Massachusetts (part of Travelers) will make refunds totaling $5,000,386; American Automobile Insurance Co. (part of Fireman’s Fund) will refund $571,394; and Electric Insurance Co. will return $123,882 to Massachusetts policyholders. The three insurers are required to send out refund checks in late October. The average refund check will be around $400. Among the checks being sent out:
· 1,424 refund checks will be over $1,000
· 2,031 refund checks will be between $501 and $1000
· 2,627 refund checks will be between $251 and $500
· 3,579 refund checks will be between $100 and $250
· 4,488 refund checks will be under $100
All 15 related settlements stem from a single consumer complaint filed with the attorney general’s office. That consumer owned a 1999 Harley-Davidson Road King Classic.
In each year between 2003 and 2008, the insurance company calculated the consumer’s premiums as if his 1999 Road King Classic were brand new and worth $20,000. By 2003, however, the consumer’s four-year-old motorcycle was worth significantly less than its original $20,000 price, and by 2008, the nine-year-old motorcycle was worth less than $12,000.
Still, in each year between 2003 and 2008, the consumer’s insurance company used the inflated $20,000 value to rate his policy, resulting in more than $1,500 in overcharges, according to the attorney general’s office.
“We are very concerned that the auto insurers in this state were able to overcharge so many Massachusetts consumers on such a large scale,” said Coakley. “We are pleased that our investigation, which began with a single consumer complaint, has resulted in the return of nearly $40 million to Massachusetts motorcycle owners.”
Massachusetts consumers who think they may also be entitled to a refund from insurers can use the attorney general’s motorcycle insurance refund webpage to find out whether they are eligible and how much they may be entitled to receive.