Many Massachusetts motorcyclists to get rebates under insurance settlements
Three insurers will collectively return more than $11 million to motorcycle owners in Massachusetts who were overcharged for insurance, under settlements the companies reached with Attorney General Martha Coakley’s office.
Coakley’s staff said Safety Insurance Co. will return $7.2 million, Liberty Mutual will return $3.1 million and Quincy Mutual will return $800,000 to current and former customers. The companies also will make payments to the state totaling $500,000.
Coakley’s staff has been investigating this issue for more than a year. Her investigators found that insurers were not adjusting motorcycle values for their steady depreciation over time and instead were using the same value for a bike for several consecutive years to gauge premium levels.
The average refund to consumers could approach $300, but some could get thousands of dollars. Coakley’s staff estimates that tens of thousands of motorcycle owners in Massachusetts could be affected.
Glenn Greenberg, a spokesman for Boston-based Liberty Mutual, said about 9,200 current and former Liberty Mutual customers will see a rebate, and the typical rebate would be about $150.
“We have immediately addressed and corrected the issue,” Greenberg said. “We’re promptly refunding everybody that’s due a refund.”
Kevin Meskell, an executive vice president at Quincy Mutual, said his company doesn’t yet know how many of its 2,800 Massachusetts customers who own motorcycles will be affected. He said it’s likely at least 2,000 policyholders would get some kind of rebate.
“It was certainly nothing that Quincy Mutual intended to do,” Meskell said. “As soon as this was brought to our attention, we corrected all of our internal processes to make sure it doesn’t happen again.”
Peter Rice, a lawyer for Boston-based Safety Insurance, said Safety disagreed with Coakley on a number of points, but the settlement provides for the best interests of Safety’s policyholders.
Rice said Safety had been following standard practices used by many Massachusetts insurers to calculate premiums for motorcycle coverage.
Motorcyclists praised the settlements, which were filed in Suffolk Superior Court on Thursday. But they said that a number of other insurance companies also evaluated motorcycles incorrectly.
Paul Cote of Amesbury, a longtime advocate for motorcyclists, said he wouldn’t be surprised if a dozen other insurers also overcharged customers based on improper valuations.
“It’s a start, a start that only represents at minimum 10 percent of what motorcycle consumers have been overcharged for the past 10 years,” Cote said of Coakley’s settlements.
Betsy Lister, an insurance agent from Medford who drives a motorcycle, said motorcyclists have repeatedly raised this issue with the state Division of Insurance and the attorney general’s office. She said the timing of the settlements was curious, given that they were announced in the heat of Coakley’s race for a seat in the U.S. Senate.
“They’ve been doing it going back to the early 2000s,” Lister said of the insurers’ overcharges. “This is something we’ve been fighting for years.”
By Jon Chesto
The Patriot Ledger