Five more insurers settle motorcycle overcharge cases Motorcyclists to be reimbursed for more than $12 million in overcharges

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http://www.patriotledger.com/business/x819631226/Five-more-insurers-settle-motorcycle-overcharge-cases Five more insurers settle motorcycle overcharge cases Motorcyclists to be reimbursed for more than $12 million in overcharges By Jon Chesto The Patriot Ledger Posted Oct 13, 2010 @ 03:52 AM

BOSTON — The refunds continue to roll in for motorcycle riders now that Attorney General Martha Coakley’s office has reached settlements with five additional insurance companies to collectively reimburse their customers for more than $12 million in overcharges.

With the latest round of settlements, Coakley and her attorneys have obtained agreements that will lead to the return of nearly $34 million in excess insurance premiums to motorcycle riders in the state. More than 100,000 policies are eligible for refunds under the settlements that have been reached so far, with an average refund size of about $320.

The insurers that settled apparently failed to account for the depreciation of the motorcycles over an extended period of time in setting rates for their customers.

Coakley cites an example of a couple from Lynnfield – the original complainants who tipped Coakley’s office to the issue – who had been charged from 2003 through 2008 as if the couple’s 1999 Harley-Davidson Road King Classic was worth $20,000 each year over that time. However, by 2008, the motorcycle was nine years old and worth less than $12,000.

The latest insurers to settle include Arbella Mutual Insurance Co. of Quincy (with an estimated settlement of $6.3 million), Hanover Insurance of Worcester ($2.5 million), Canton-based OneBeacon ($2.1 million), Florida-based NGM ($645,679) and Dedham-based Norfolk & Dedham ($554,480).

Motorcycle insurers have described the overcharging as an honest mistake.

For example, Arbella spokesman Doug Bailey said the company implemented procedures to correctly rate consumers’ motorcycles as soon as the company learned of the issue in 2009. Bailey said the rating process for automobiles involved an automatic depreciation each year when a policy was renewed. But a similar automatic process wasn’t in place for motorcycles.

The other companies that have settled with Coakley in this investigation include: Plymouth Rock (and its Pilgrim Insurance affiliate), Metropolitan Property & Casualty Insurance, USAA, Liberty Mutual, Quincy Mutual and Safety Insurance.