BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a $14.9 million settlement on Monday with a motorcycle insurer to resolve allegations it overcharged thousands of motorcycle owners on their policies.
Commerce Insurance Company, which was acquired by MAPFRE in 2008, is the largest writer of automobile insurance in the state. Commerce allegedly overcharged certain customers between 2002 and 2011 by using inflated and un-depreciated motorcycle values to calculate insurance premiums.
While Commerce changed its business practices in 2005 in an attempt to comply with required rating procedures, Coakley alleged that some overcharges occurred after 2006.
Under the terms of the settlement, Commerce will pay $14.6 million in refunds to more than 40,000 policyholders and $325,000 to the state.
Including Monday's settlement, Coakley's office has obtained a total of $57.4 million for consumers during a four-year inquiry into motorcycle insurance companies. Coakley's office has settled with 19 insurance companies since 2010, generating refunds on more than 150,000 policies in Massachusetts.
"Our extensive investigation into these insurance companies has resulted in the return of millions of dollars to thousands of Massachusetts motorcycle owners," 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."
The settlements all stem from a consumer complaint received by Coakley's office. The owner of a 1999 Harley-Davidson Road King Classic alleged his insurance company calculated premiums for his motorcycle as if it were brand new, leading to more than $1,500 in overcharges. Coakley's office looked into motorcycle rating practices in the state and alleged the unlawful practice was widespread.