less than $11,000 to settle their claim after the motorcycle was stolen. After the owners requested $20,000 in settlement of their claim, Safety tried to refund over $1,500 in premiums to them based on the mistaken $20,000 value that Safety had used to rate their insurance policy in each year between 2003 and 2008.
Liberty Mutual will begin paying re-
funds in May; the remaining insurers
are expected to send checks to con-
sumers in the fall. Projected average
refunds to consumers are expected to
be about $300; however some con-
sumers will receive thousands of dollars
based on several factors, such as the
length of their policy and the price of
their motorcycle. In order to be eligi-
ble for settlement funds, a consumer’s
motorcycle must have been overvalued
by their insurance company and the
consumer must have purchased either
collision or comprehensive coverage.
Coakley’s office estimated that “tens of
thousands of policies” were affected. ■
■
Based on this complaint, the AG’s Office became concerned that Safety was misusing its rating manual, which required Safety to use current motorcycle book values to calculate the premiums charged to consumers. After determining that Safety had used inflated and un-depreciated motorcycle values to rate coverage for thousands of its policyholders, Coakley’s office expanded its review to other insurance companies. The AG’s investigation found that many auto insurers operating in the Massachusetts marketplace had failed to obtain current book values for motorcycles they insured and were instead using inflated and out of date values to calculate premiums. The Attorney General’s investigation also found that while the alleged overcharges began during the “fix-and-establish” period, when the state capped auto insurance rates, the overcharges continued after the deregulation of the auto insurance market and the introduction of managed competition to the personal lines auto market.
WASHINGTON, D.C. — The National Association of Professional Insurance Agents (PIA) expressed disappointment that authorization for the National Flood Insurance Program (NFIP) was allowed to lapse after one United States senator filibustered the legislation to which it was attached.
BOSTON — Massachusetts Gov. De-val Patrick recently reversed his stance on a new $5 fee for visiting Registry of Motor Vehicles branches and conducting transactions in person.
The Commonwealth billed it as a chance for customers to “avoid a $5 branch counter fee” on licensing and registration by using the RMV’s online services options. It was scheduled to go into effect on March 1.
The flood program slipped into a technical lapse at midnight on Feb. 28 after Sen. Jim Bunning (R-Ky.) blocked passage under unanimous consent of a bill to extend unemployment and COBRA benefits. The extension of the National Flood Insurance Program (NFIP) was attached to that bill.
The Administration touted its efforts to
“Insurance agents and their clients who need flood insurance are now at a disadvantage. Many real estate transactions require flood insurance, and the NFIP is the sole source for more than 95% of the flood coverage nationwide. We could see real estate closings delayed until this is fixed,” said PIA National Director of Federal Affairs Mike Becker.
Congress has been extending the flood insurance program for short intervals over the past two years. Efforts to enact comprehensive reforms to the NFIP have been stymied in recent years over two issues: proposals to add coverage for wind damage to the flood program and forgiving the nearly $20 billion debt amassed by the program as a result of catastrophic storms in 2004 and 2005. PIA said it opposes inclusion of wind coverage in the NFIP program and supports debt forgiveness.
Becker added that any comprehensive flood insurance program reform bill should include a five-year authorization. ■
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