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The Progressive insurance company is paying the state of Massachusetts $120,000 and reimbursing customers after volunteering that its Web site had provided inaccurate rate comparisons.
The Ohio-based Progressive Casualty Insurance Co. began selling policies in Massachusetts on May 1, 2008, as part of Gov. Deval Patrick’s new managed competition auto insurance system.
In a settlement announced this week, Attorney General Martha Coakley said Progressive sometimes quoted prices for yearlong policies when asked the prices of six-month policies, which usually are more expensive.
Coakley said the company, which is based in the Cleveland suburb of Mayfield Village, violated the terms of its rate proposals by charging consumers for additional drivers listed on their policies, even when they had their own insurance.
She said Progressive agreed to send transfer notices to customers’ former agents or insurance companies stating it was now writing the drivers’ policies. But in its failure to send the notices, she said, consumers unknowingly were being canceled for nonpayment by their former carriers.
Such cancellations can affect a consumer’s credit rating and his or her ability to use an installment payment plan in the future. Under the terms of the settlement, Progressive will help any affected consumers repair their credit histories.
Progressive, which has 28,000 employees in more than 450 offices nationwide, also has eliminated its rate comparison tool for Massachusetts quotes, and telephone representatives have stopped quoting comparisons.
Progressive was “glad to put this matter behind us,” a spokeswoman said.
“We understand that the attorney general’s role is to protect consumers, and we wholeheartedly support that goal,” spokeswoman Leah Knapp said.