Safety Insurance has begun refunding a total $7.2 million to roughly 21,000 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 for motorcycles to calculate insurance premiums. Safety is the largest of the settling insurance companies to begin the refund process.
In total, to date, 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.
The refunds covers policies 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. In total, the seven insurance companies that have settled are expected to return over $20 million to over 50,000 consumers and pay over $1 million to the state.
Liberty Mutual and Quincy Mutual completed the refunds earlier this summer. Plymouth Rock Assurance, Pilgrim Insurance Company, Metropolitan Property & Casualty and USAA are expected to begin sending refund checks to consumers later this fall.
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