BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced on Tuesday that more than $5.6 million in additional insurance refunds are headed back to Massachusetts motorcycle owners.
Premier Insurance Company of Massachusetts, American Automobile Insurance Company and Electric Insurance Company issued the refunds under settlements reached with Coakley's office in October. Statewide, Travelers will return $5,000,386, Fireman's Fund is making $571,394, and Electric is sending $123,882 in refunds.
"Our motorcycle insurance investigation began with a single consumer complaint," Coakley said. "Our investigations will continue until each and every insurance company that engaged in this practice has refunded the overcharges to its customers."
The payments by Travelers, Fireman's Fund and Electric are part of Coakley's industry-wide inquiry into motorcycle rating practices. In total, 15 insurance companies settled with Coakley's office, which has resulted in approximately $40 million in refunds for state motorcycle owners.
The other 12 settling companies include Safety Insurance Company, Arbella Mutual, Plymouth Rock, Pilgrim, Metropolitan P&C, Liberty Mutual, Hanover, OneBeacon, Quincy Mutual, Norfolk & Dedham, USAA and NGM Insurance Company. A number of cases against additional insurance companies remain in progress.
All 15 related settlements stem from a single consumer complaint filed with Coakley's office. That consumer owned a 1999 Harley-Davidson Road King Classic. Every year between 2003 and 2008, the consumer's insurance company calculated the consumer's premiums as if his 1999 Road King Classic were brand new and worth $20,000. By 2003, however, the consumer's four-year-old motorcycle was worth much less than its original $20,000 price and, by 2008, the nine-year-old motorcycle was worth less than $12,000. Despite the decrease in value, the consumer's insurance company used the inflated $20,000 value to rate his policy each year, resulting in more than $1,500 in overcharges.