BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced on Tuesday that Massachusetts motorcyclists have begun getting their refund checks as part of a $7.4 million settlement she reached with a motorcycle insurance company earlier this year.
Safety Insurance Company is sending checks to thousands of motorcyclists in the state to fulfill the terms of its settlement. The company allegedly overcharged motorcyclists in the state through inflated insurance premiums by inflating values of the vehicles.
The company completed the first phase of its settlement agreement by sending 21,258 proffer letters to affected consumers earlier this month. Refund checks have been distributed to those who have returned signed release forms.
Under terms of 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.
Those affected had purchased comprehensive and/or collision coverage for their motorcycle in the period of January 1, 2002, through November 21, 2008, and allegedly had their vehicle overvalued by the company when the premium was calculated.
Coakley's Insurance & Financial Services Division received complaints about motorcycle rating practices in the fall of 2008, and Coakley feels that many of the insurance companies operating in the state between 2002-2009 engaged in similar activities.
Coakley has reached similar settlements with six other insurance companies this year, which will result in total of more than $20 million in restitution to Massachusetts motorcycle riders.
Other settlements this year were made with Liberty Mutual, Plymouth Rock Assurance, Pilgrim Insurance Company, Metropolitan Property & Casualty, USAA, and Quincy Mutual. 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.