BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a settlement Tuesday with an auto insurance company that allegedly overcharged hundreds of consumers for their premiums.
Safety Insurance Company allegedly overcharged the consumers by failing to reduce premiums as the drivers gained additional years of driving experience. Safety's private passenger auto insurance rating manual said the company would adjust policyholders premiums as certain drivers gained added years of experience. Safety allegedly failed to make the mid-term class changes, resulting in overcharges to many drivers in their teens and early twenties.
"This is yet another example of an insurance company failing to calculate premiums correctly," Coakley said. "While we are pleased that Safety agreed to refund the alleged overcharges, this case underscores the need for auto insurance transparency and oversight."
Under the terms of the settlement, Safety must pay $200,000 in restitution, make additional payments to motorcycle and automobile insurance policyholders pending the results of a review by Coakley's office, pay $45,000 to the state and correct its business practices in the future.
Coakley's office is evaluating whether other insurance companies properly adjusted their policyholder premiums as inexperienced drivers gained added years of licensure. Since taking office, Coakley's office has brought more than 30 cases against auto insurers, resulting in the return of more than $43 million of alleged overcharges to consumers in Massachusetts.