Spanish insurer Mapfre, S.A. acquired The Commerce Insurance Company in 2008
The largest writer of private passenger auto insurance in Massachusetts entered into a settlement with Attorney General Martha Coakley’s Office this week in which the Webster-based insurer has agreed to refund thousands of motorcycle owners who were allegedly overcharged on their policies.
“Our extensive investigation into these insurance companies has resulted in the return of millions of dollars to thousands of Massachusetts motorcycle owners,” AG Coakley said. “Identifying these troubling overcharges continues to underscore the need for transparency in auto insurance rating practices, and we are pleased to have facilitated refunds for consumers statewide.”
Under the terms of the settlement filed in Suffolk Superior Court, Mapfre/Commerce will refund a total of $14.6 million dollars to its motorcycle policyholders in the Commonwealth. Commerce allegedly overcharged certain customers between the years 2002 and 2011 via the use of inflated motorcycle values. These values were then used to calculate insurance premiums resulting in overcharges to policyholders. While the AG acknowledged that Mapfre/Commerce changed its business practices in 2005 in order to comply with the Commonwealth’s required rating procedures, their investigation nonetheless found that some overcharges to motorcycle policyholders continued after the year 2006.
As a result, Mapfre/Commerce will pay the $14.6 million to more than 40,000 of its policyholders affected as well as $325,000 to the Commonwealth. Later this month, the insurer will begin sending out refund checks in amounts ranging from less than $50 dollars to more than $12,000 per consumer.
The Attorney General’s Motorcycle Insurance Investigations Is Now In Its Fourth Year
The initial investigation into motorcycle insurance began in 2010 stemming from a single consumer complaint. The owner of a 1999 Harley-Davidson Road King Classic contacted the Attorney General’s Office complaining that in the years between 2003 and 2008, his insurance company had been calculating the owner’s premiums for his motorcycle as if the motorcycle were brand new. This practice resulted in more than $1,500 in overcharges. After its initial examination of the first insurance company, the Attorney General expanded its investigation to motorcycle rating practices across the Massachusetts automobile insurance industry finding the practice to be widespread.
As the Attorney General’s motorcycle insurance investigation now enters its a result of this fourth-year, the AG has already entered into 19 different motorcycle insurance settlements obtaining a total of $57.4 million dollars in refunds to over 150,000 policyholders. As the largest private passenger auto insurance writer in the Commonwealth, this latest settlement agreement with Mapfre/Commerce is the largest to date for the Attorney General’s Office with over 40,000 insureds slated to receive refunds.
For those interested in knowing who might be eligible for refunds, the Attorney General has provided the following information:
In order to be eligible for a refund under one or more of AG Coakley’s settlements, consumers must have purchased Comprehensive, Collision, and/or Limited Collision coverage for a motorcycle during certain time periods (typically between 2002 and 2010), and their motorcycle must have been overvalued by their insurance company. Commerce policyholders will be able to determine their refund eligibility using the Attorney General’s Motorcycle Refund Lookup Application later this month.