A refund for bikers

Biker Rights Issues

Doc D'Errico of Southboro on his Harley-Davidson. He got a $700 refund from his insurer. (T&G Staff/JIM COLLINS)
MOTORCYCLE CHARGES REPAID BY INSURERS

By Elaine Thompson TELEGRAM & GAZETTE STAFF
ethompson@telegram.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it

When Doc D'Errico paid his insurance premiums on his Harley-Davidson, he assumed the similar amount each year included a surcharge, because motorcycles are considered recreational vehicles by insurance carriers.

“A motorcycle I purchased in 2003 I paid over $20,000 for was worth only about $12,000 when I sold it in 2008, yet I was being charged each year for almost the purchase price in value,” said the Southboro resident, who is safety and education director for the Massachusetts Motorcycle Association. “There were a lot of assumptions I made about just owning a motorcycle that I thought I was just going to have to live with it.”

After complaints from other bikers, Mr. D'Errico was contacted by Attorney General Martha Coakley's office two years ago for assistance in getting an understanding of the extent of the issue and addresses of motorcycle owners. An investigation by the attorney general's Insurance and Financial Services Division determined that insurance companies had overcharged motorcycle owners on premiums by overstating and failing to depreciate motorcycle values.

The state has reached settlements with seven insurance companies to return more than $20 million to more than 50,000 motorcyclists and pay the state more than $1 million. Several other insurance companies are still under investigation.

Quincy Mutual and Liberty Mutual sent out refunds this summer. Refunds from Safety, Metropolitan Property & Casualty, USAA, Plymouth Rock Assurance and Pilgrim Insurance Co. are being sent out this fall.

“We are waiting for and hopefully there will be other companies as well,” said Mr. D'Errico, who received a refund check of about $700 from Safety Insurance. More than 2,000 motorcycle owners in Worcester County, including 149 in the city of Worcester, have or will receive refund checks totaling $740,120.60. The average refund amount is $353.11. According to the attorney general's office, 1,700 policy holders throughout the state are eligible for refunds between $1,000 and $24,655.

People can find out if they are eligible for a refund under the settlement by clicking on the new Motorcycle Insurance Refund Lookup section of the AG's website, www.mass.gov/ago, or calling the Insurance and Financial Services Division at (888) 830-6277. To be eligible, a motorcycle owner must have purchased comprehensive or collision coverage between Jan. 1, 2002, and Nov. 21, 2008.

Safety's refunds total the most, at $7.4 million. Peter Rice, an attorney with the Boston-based Dewey and LeBoeuf law firm, said Safety never admitted any wrongdoing in the settlement, although it is paying out the refunds and has agreed to make some changes.

He said the problem stemmed from a rule by which insurance companies underwrite and price insurance. He said the attorney general took the position that the insurance companies were misinterpreting the rule.

“We changed the language of the rule so that it is no longer ambiguous,” he said.

David P. Menard of Whitinsville, who drives a 1997 Harley Road King, received a $1,125 refund check Monday from Safety. He said he'll probably use the money to do some home repairs or to buy himself a toy.

“It's awesome. Unexpected money is good. It all worked out great,” he said. “I'm assuming that they're all going to do what's right now and not overcharge us. Fortunately, we have some watchdogs looking at this stuff, so I'm putting my trust in them.”

Ronald Paille of Uxbridge said he's not happy about the premium overcharge on his 2004 Italian Moto Guzzi and he is going to be more of a watchdog himself. A $570 refund check from Liberty Mutual in August helped pay for a trip to Virginia Beach for him and his wife.

“It definitely brought some awareness to want to check into other areas to see if I am being overcharged,” he said. “It made me more aware, so that's some good to come out of it.”

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