More Massachusetts Motorcycle Riders Get Insurance Refunds
The State of Massachusetts has reached settlements with five more auto insurance companies over allegations that they overcharged tens of thousands of Massachusetts residents for motorcycle insurance.
As a result, riders will get $12.1 million back from their insurance providers. State Attorney General Martha Coakley launched the investigation alleging that Arbella Mutual Insurance Company, Hanover Insurance Group, OneBeacon Insurance (aka Massachusetts Homeland), National Grange Mutual (NGM), and Norfolk & Dedham Group (N&D) used inflated and un-depreciated motorcycle values to calculate premiums for Massachusetts motorcycle riders, resulting in more than $12 million in overcharges.
Coakley reached similar settlements with seven other insurance companies earlier this year. In total, the 12 insurance companies that have settled with the Attorney General's Office are paying back more than $33.8 million to Massachusetts residents and over $1.5 million to the state.
One consumer started it all
"We began our industry-wide investigation into motorcycle insurance based on a single consumer complaint. To date, that investigation has forced 12 insurance companies to return more than $33 million to Massachusetts motorcycle owners," Coakley said. "As this investigation demonstrates, and as the insurance companies in this state know, when consumers bring complaints to our office, we listen and we take action."
The settlements stem from allegations that these insurance companies were illegally using inflated motorcycle values to calculate premiums and failing to depreciate motorcycle values as policies renewed.
For example, the couple from Lynnfield that filed a complaint with Coakley owned a 1999 Harley Davidson Road King Classic. In each year between 2003 and 2008, the investigation showed that Safety Insurance Company had charged the couple premiums as if their 1999 Road King Classic were worth $20,000. However, by 2008, the couple's motorcycle was nine-years-old and worth less than $12,000.
As a result, Safety overcharged the couple by more than $1,500. As a result of this industry-wide investigation, the Attorney General's Office has identified over 100,000 policies that are eligible for refunds under the settlements reached to date. Average refunds under the settlements are around $320
(reprinted from consumeraffairs.com)