Massachusetts AG Settles with Five Auto Insurers

02/18/2010

A recently announced settlement is expected to help Massachusetts auto insurance customers save money in the coming years.

The state's insurers charge premiums based on information in the Comprehensive Loss Underwriting Exchange, which is used to establish driving history. Five companies had failed to update at-fault determinations within the database, leading thousands of customers to receive higher rates than appropriate.

"We are pleased that the settling insurance companies cooperated with our review and agreed to work with our office to fix this problem," Massachusetts Attorney General Martha Coakley said in a statement. "If this problem had not been caught and corrected, this incorrect data might have plagued consumers and inflated their premiums for years to come."

The insurers will pay the state more than $100,000 as part of the settlement. They will have four months to identity and reimburse customers that were overcharged. Rates will also be recalculated based on accurate at-fault information.

Massachusetts is among 12 states with a no-fault auto insurance law, according to the Insurance Information Institute. It employs a monetary threshold, meaning that the severity of any lawsuit must depend on the medical bills incurred by the injured party.

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