AG’s Office says their evaluation of other auto insurance companies’ practices continue: Copy of assurance of discontinuance attached to this post
Safety Insurance has agreed to pay more than $200,000 to settle allegations that it has overcharged hundreds of Massachusetts consumers through its failure to reduce premiums for those drivers who over the years had gained additional years of driving experience. Pursuant to a settlement filed in Suffolk Superior Court earlier this week, the insurer will pay the $200,000 in restitution along with additional payments to both its automobile and motorcycle policyholders pending the results of an AG-supervised audit.
“This is yet another example of an insurance company failing to calculate premiums correctly,” commented Attorney General Martha Coakley in an official statement. “While we are pleased that Safety has agreed to refund the alleged overcharges, this case underscores the need for auto insurance transparency and oversight.”
The Attorney General’s Office went on to explain that under the guidelines set forth in Safety’s private passenger auto insurance rating manual, a policyholder’s premium is supposed to be adjusted as certain drivers gain additional years of driving experience. The Attorney General’s office, however, contends that upon examination it found that the Massachusetts insurer had failed to make many of these adjustments to their insureds’ policies. As a result, instead of implementing these mid-term class changes, as they are called, many policyholders remained with the same premiums resulting in overcharges to hundreds Safety’s insureds.
Safety Insurance has agreed to refund the alleged overcharges plus six percent to its affected policyholders in the Fall of 2013, the majority of whom are in their teens and early twenties. In addition, the Massachusetts insurer has agreed to pay the Commonwealth $45,000 along and will institute changes to its business practices to avoid similar issues in the future.
The AG’s Office says that since taking office, Attorney General Martha Coakley has brought more than 30 cases against auto insurers, resulting in the return of more than $43million in alleged overcharges to Massachusetts consumers.
