$7.4 Million in Motorcycle Insurance Refunds Being Distributed to Massachusetts Motorcycle Riders Under Settlement with Attorney General Martha Coakley
Safety Insurance Company completed the initial process of sending 21,258 proffer letters to affected consumers earlier this month and has since begun sending refund checks to those consumers who have returned signed release forms to Safety. 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.
In order to be eligible for a refund, a consumer must have purchased comprehensive and/or collision coverage for a motorcycle between January 1, 2002 and November 21, 2008 and the motorcycle must have been overvalued by Safety Insurance Company for the purposes of calculating premiums. Policyholders can find out what value Safety used to rate their motorcycle policy by looking on the back of their policy's coverage selection page in the "Additional Information" box.
Consumers who think they may be entitled to a refund under the Attorney General's settlement can visit the new Motorcycle Insurance Refund Lookup Section of the Attorney General's Website to find out if they are in fact eligible. The Attorney General's Office created this section on the website in order to ensure that consumers are aware of and able to obtain their refund checks. If a consumer is eligible for a refund according to the website, but has not received a letter from Safety, the consumer should immediately call Safety at 1-877-951-6416 to see if Safety sent the letter to the consumer's current address. Consumers who have questions about the settlement or their refund may visit the Attorney General's webpage about the motorcycle insurance settlements or call the Attorney General's Insurance & Financial Services Division at 1-888-830-6277.
The Attorney General's Insurance & Financial Services Division began its investigation into motorcycle rating practices in the fall of 2008 after receiving a consumer complaint about the way Safety Insurance Company had valued a motorcycle. The Attorney General's investigation ultimately found that many of the insurance companies operating in Massachusetts between 2002 and 2009 had used inflated motorcycle book values to calculate premiums for their customers and that tens of thousands of Massachusetts residents had been affected by the resulting overcharges.
For example, Safety Insurance Company had overcharged a couple from Lynnfield, Massachusetts by more than $1,500 by valuing the couple's 1999 Harley Davidson Road King Classic at $20,000 in each year between 2003 and 2008. In fact, the motorcycle's book value was significantly less than $20,000 in 2003, and by 2008 the motorcycle's book value had fallen to less than $11,000. Still, Safety was calculating premiums for the couple based on the inflated $20,000 motorcycle value.
To date, the Attorney General's Office has reached settlements with Liberty Mutual, Plymouth Rock Assurance, Pilgrim Insurance Company, Metropolitan Property & Casualty, USAA, and Quincy Mutual to resolve similar allegations. 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 Commonwealth.
Liberty Mutual and Quincy Mutual completed the process of sending out 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. Information on refunds available under these settlements will be available on the Motorcycle Refund Lookup Website in October. A number of other insurance companies remain under investigation.
These cases are being handled by Assistant Attorney General Glenn Kaplan, Investigations Supervisor Arwen Thoman, Mathematician Burt Feinberg and Economist Bryan Lincoln all of AG Coakley's Insurance & Financial Services Division.