An insurance company will be paying around $400,000 to Massachusetts drivers who possess clean driving records but whose auto insurance policies were wrongfully terminated.
Following an investigation conducted by the Attorney General’s Office (AGO) since 2010, Metropolitan Property and Casualty Insurance Company (Met P&C) will pay for restitution to those drivers who were forced to switch insurers after their policies were terminated.
According to the Attorney General’s Office, Met P&C refused to renew 2,600 auto insurance policies. Those policies belonged to drivers who have spotless driving records for the previous three years. Massachusetts’ state law mandates the “clean-in-three” rule that applies to policies before April 2011 – wherein auto insurance companies are prohibited from terminating policies of those drivers who were able to maintain a driving record without any accident or traffic infractions for the past three years.
AGO spokesperson Jillian Fennimore described the Met P&C case as the first of its kind that their office have encountered.
Around 2,500 former Met P&C policyholders who ended up having their policies from other companies will be receiving a total of $310,000 of restitution payments or an average of $124 per policyholder. The said insurer will also pay a total of $35,000 in restitution to 56 policyholders who were forced to get their policies from the Massachusetts Automobile Insurance Plan (MAIP). The MAIP is the last option for drivers who can’t get a policy from insurers in the voluntary market, however, these policies are much costly than those from other insurance companies.
The said amounts that Met P&C will have to pay according to AGO, are based on the cost of having to change insurers.
Aside from those restitution payments, the said insurer will also be paying $50,000 to the state of Massachusetts. Metropolitan Property and Casualty Insurance Company is a subsidiary of MetLife of New York.