Coakley opposes rate increase
BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced on Thursday that she has sent a letter to the Division of Insurance urging it to reject a proposed 23.5 percent rate increase.
The proposal was made by Progressive Insurance planned for commercial auto insurance. Under Progressive's plan, taxis, trucks and small business vehicles would be affected by the increase, Coakley says.
Coakley stressed that the proposed rates were excessive and unfair to state businesses. She also alleged that information the company provided to support its rate hike was not consistent with its proposal.
"High commercial auto rates can cause significant harm to small businesses," Coakley said. "We believe Progressive's proposed increase is unjustified and an unfair rate hike on small businesses across Massachusetts."
In her letter, Coakley alleges that Progressive contradicted its actual claims history, as well as Massachusetts' overall claims history, and has refused to cooperate with her office in providing important data or answering questions about the figures they came up with.
Initially, Progressive had wanted a 26.6 percent increase, but lowered the amount once Coakley expressed her initial concerns and asked to see the supporting data.
Under state law, commercial auto insurance is required for all businesses that operate vehicles in the state.
In 2010, Progressive sold approximately $22 million worth of commercial auto insurance in Massachusetts. In a little over three years of doing business in Massachusetts, Progressive accounts for 3 percent of the commercial auto insurance market.
If approved, the rate hike would go into effect on March 24.