Safety Insurance has begun refunding a total $7.2 million to roughly 21,000 of its Massachusetts policyholders who were overcharged for motorcycle insurance, according to the state’s attorney general.
The refunds are part of a settlement with several motorcycle insurers reached earlier this year with the attorney general’s office.
The settlements stem from allegations that Safety – as well as six other insurers – used inflated book values to calculate motorcycle insurance premiums.
Safety is the largest of the settling insurance companies to begin the refund process. Attorney General Martha Coakley said the settlements will return more than $20 million to Massachusetts motorcycle riders.
The average refund to consumers under the Safety settlement is $348. Under the settlement, 1,710 policies are eligible for refunds between $1,000 and $24,655; 2,730 policies are eligible for receive refunds between $500 and $999; 3,786 policies are eligible for refunds between $250 and $499; and 13,032 policies are eligible for refunds under $250.
In some cases, those refunds reflect the multiple policy years. The refunds covers policies first issued between January 2002 and November 2008.
The other insurers that settled similar allegations are Liberty Mutual, Plymouth Rock Assurance, Pilgrim Insurance Co., Metropolitan Property & Casualty, USAA, and Quincy Mutual.
Liberty Mutual and Quincy Mutual completed the refunds earlier this summer. Plymouth Rock. Pilgrim, Metropolitan and USAA are expected to begin sending refund checks to consumers later this fall.
In total, the seven insurers expected to issue refunds to over 50,000 consumers and pay over $1 million to the state.
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