The Attorney General of Massachusetts, Martha Coakley, has made it clear that her office is opposing Progressive Insurance Company’s rate increase of 23.5% for its commercial auto insurance in the Commonwealth. In a letter sent to the Massachusetts Division of Insurance, Attorney General Coakley asked that agency to reject the Progressive Insurance Company’s planned rate increase. “High commercial auto rates can cause significant harm to small businesses,” explained Attorney General Coakley, “We believe Progressive’s proposed increase is unjustified and an unfair rate hike on small businesses across Massachusetts.” In the letter, Coakley cautioned that “the information that Progressive used to support its rate hike was inconsistent with its proposal” and that the company’s proposal “…contradicted its actual claims history, as well as Massachusetts’ overall claims history.”
Commercial automobile insurance is mandatory for all businesses that operate vehicles in the Commonwealth including taxis, trucks, and service vans. Progressive entered into the Massachusetts automobile insurance market in 2007 and in the last year alone, sold approximately $22 million worth of commercial automobile insurance. The company currently holds three percent (3%) of the Massachusetts commercial automobile insurance marketplace. Progressive Insurance began in 1937 and is headquartered in Mayfield Village, a suburb of Cleveland, Ohio. The company has 28,000 plus employees in more than 450 offices throughout the country and boasts of an A+ rating from A.M. Best. It is also one of the largest commercial vehicle insurance companies in the country and claims to be the #1 truck insurer in the United States.
Attorney General Coakley says that originally Progressive had filed a proposed rate hike of 26.5%, but reduced that number to 23.5% after her office began to question their proposed rate increase and supporting data. If the Commissioner of Insurance approves the proposed 23.5% increase, the new rates will become effective March 24th, 2011. The Boston Globe reports that this high increase was approved by the Commission on January 31, 2011. The increase would be Progressive’s fifth in three and a half years while having been in the Massachusetts market a total of four.