Auto Insurance Companies To Reimburse Customers

Auto Insurance CompaniesPost Date April 5, 2013 – Four Massachusetts auto insurance carriers were recently served with law suits.   The car insurance carriers were sued for overcharging their customers through their legally mandated surcharges.  Those with accidents, tickets and violations even DUI”s were effected.  The Massachusetts Attorney General Martha Coakley, whom recently ran for the United States Senate in a statement disclosed that settlements were filed last month with four auto insurance companies;  Massachusetts Home Insurance Company, Premier Insurance Company of Massachusetts, Pilgrim Insurance Company, and Plymouth Rock Assurance Corporation. The settlement terms with the auto insurance companies the said insurers will impose an audit on their insurance policies in order to determine how much will be refunded to consumers. The payment will be collectively given by the Massachusetts auto insurance companies through out the state. Aside from the refund to it’s car insurance company customers, interest will be paid to all the victims.

Auto insurance companies to return over-payments…..

There may be a number of extra payments paid to the over charged customers.  The Attorney General’s Office will be conducting audits to insure all the misappropriated funds.  Coakley said they began investigating the surcharges after they received a complaint from a customer whose surcharge were already overturned by the Board of Appeal in 2010. The complaint was against Metlife Property & Casualty. The outcome of the investigation showed that in 2012, the Met and other auto insurance companies  did not refund the consumers of  $700 in car insurance overpayments. The case resulted to a settlement in January this year.

When investigating other insurers, the attorney general found that the four car insurance carriers mentioned above are still charging the surcharges. The Board of Appeals in Massachusetts is very much like the Department of Insurance in the State of Pennsylvania.  Both organizations are independent bodies tasked to review the fairness of how auto insurance companies set rates, determine surcharges and resolve issues for insurance customers.  In the past ten years, the Board had already vacated more than 40,000 surcharges and the refunds were imposed through settlement with auto insurance providers. Coakley’s office is still evaluating other Massachusetts auto insurance companies and their surcharge practices.

-Mike 

Michael E. Dortch
President &  Senior Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 206

Massachusetts Insurance Deptartment Fines Auto Insurance Carrier For Using Credit

Friday’s Post 12.16.11 –  The Massachusetts Division of Insurance recently announced that one of the states direct auto insurance writers and one of the nations largest companies had agreed to settle a fine of $125,000 plus other penalties, for wrongly informing some of its clients that it had used their credit information to calculate monthly premiums for car insurance. As from September 2010, the carriers domain featured a link titled “You and your Credit Information”. This link directed consumers to an inquiry page on their personal credit information. The results displayed the policyholder’s personal details, including how the company used personal credit information, to generate auto insurance premium rates. They also included the positive and negative factors that influenced the interest rates charged on the policyholder.  Massachusetts state insurance guidelines, bar auto insurance companies from using anyones personal credit information to determine their private passenger auto insurance policy rates. The company took down the link from its domain mid November at the behest of the Division of Insurance. Over three thousand auto insurance customers had already clicked on the link, and reviewed personal credit information therein. However, the carrier claims that they did not use this data in calculating premium rates for their customers.

The Massachusetts Commissioner of Insurance insisted that the state does not permit the use of credit scores to determine interest rates for automobile insurance. Such a practice not only infringes on state regulations, but also violates client’s trust on insurers.  Consequently, the auto insurance carrier was required to contact all customers who received the wrong notifications and explain their significance. Further, they have to offer these customers a free check on their credit report. Massachusetts Division of Insurance introduced radical changes to the auto insurance market in 2008. New guidelines allowed insurers to set their own interest rates in order to compete effectively for market share. This led to an overall reduction in premium rates across the board, with new carriers joining the marketplace in droves. Part of these measures included regulations to protect consumers from unfair practices by auto insurance providers. These included a curb on the use of credit scores, marital status, occupation and homeownership, to determine premium rates for private passenger vehicle insurance.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

New Law Offers Victory For Massachusetts Car Insurance Consumers

Tuesday’s Post 11.6.11 –  Auto Insurance Companies must function under a new law which will no longer consider a customer’s credit history when setting car insurance rates in Massachusetts.  This is great news for insurance consumers, especially in face of the current economic times. The move is also timely since the holiday season is upon us and customers now may have some extra money for that special gift.  A spokesman for the “Massachusetts Association of Insurance Agents” (MAIA), said that it was bad policy for insurance firms to use credit history to calculate premium rates, since it doesn’t reflect on a person’s ability to do in both the present and future. The insuring scoring issue has been a subject of debate especially in Massachusetts which is one of the states that has enforced regulatory bans on this practice. Insurers are of a different opinion; their argument is that a person’s credit status is a valid predictor of the risk involved and should thus be considered when rates are being set.  The critics disagree with this notion and term it as oppressive to low-income earners. Using credit history is undermining one’s drive. The officials maintain that the auto insurance consumers should not be overcharged due to a few hiccups in their credit history.  The premiums charged should be based on factors such as driving experience and records.  The signing in of this law will be a major relief to consumers in Massachusetts, since the unfair and discriminatory way of setting premiums will now be a thing of the past. A customer’s financial woes in the past should not hinder them from getting affordable insurance.   A study conducted by the “Federal Trade Commission” concluded that there is no strong correlation between credit scores and the size of claims, however, they could not find out why. This move by the MAIA officials has come under heavy criticism from various insurance organizations such as “Property Casualty Insurers Association of America”. After a joint house hearing in November, MAIA focus was targeted towards coming up with a compromise bill.

It was 1995 when InsureDirect.com’s agents started using credit scoring in Pennsylvania.  Progressive and Infinity Insurance Company (known as Leader Insurance at the time) introduced using a customers previous credit history to set auto insurance rates.  At the time, I felt it was very unfair to incorporate this practice in establishing one Auto Insurance Payment.  As time passed and I started to understand how credit scoring worked – I became a believer.  Although the critics are correct, credit is not a predictor of the severity of a person claims – it does predict frequency.  The bottom is, those whom have better credit have fewer accidents.  Further, those whom have better credit pay less for their auto insurance.  The same is true for a credit card or bank loan.  The better your credit; the lower the rate you pay in interest.  Like it or not, those with better credit tend to pay the debts on time and have less auto accidents.  Please keep this in mind.  There are may auto insurance carriers whom don’t use credit.  When you call the offices of InsureDirect.com, let us know how you want to be rated.  It’s your choice.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

 

 

InsureDirect.com offices Shake From Earthquake

On Tuesday August 30, 2011,  a strong earthquake rattled the East Coast of the US starting in the State of Virginia. The earthquake was so strong that it could be felt as far as Pennsylvania and inside the corporate offices of InsureDirect.com in Lansdale, PA which is 35 miles northeast of Philadelphia and all the way to Canada. The earthquake has shaken buildings, delayed flights and trains, and sent confounded workers inside buildings into the streets. Despite its severity, the 5.9 magnitude earthquake had not  injured or taken anyone’s life. Despite this, the Pentagon and the US Capitol, in Washington DC, were briefly evacuated. The states effected were Virginia, Maryland, Delaware, New Jersey, Pennsylvania, New York, Connecticut, New Hampshire, Vermont and Maine.

Spokesman; Larry Beach said that the quake could still be felt 83 miles from the epicenter. Larry works at the US Agency for International Development in Washington. 5.5 to 6-magnitude earthquakes have the ability to shake, and bring forth damage to the building; especially when the quake is shallower. Amtrak, in line with the destruction caused by the earthquake, commenced a reduced speed policy between Washington and Baltimore. In addition, track crews are busy checking rails for damage. Two nuclear reactors in Virginia were shut off for safety’s sake; traffic lights, too, have been shut down for a short time after the tremors gradually ended. A spokesman says that three pinnacles from the center tower of the Washington National Cathedral have broken due to the quake.

Due to the intensity of the earthquake, some people living in high-rise building experienced sea sickness during the earthquake due to the shaking motion of the building. The earthquake grounded all flights in John F. Kennedy International Airport and Newark Liberty Airport for a brief period of time due to the evacuation of Tower Controllers. “I thought I was dizzy and I needed to drink more water,” said the manager of Sportello, Heather Kennaway. He was at first unaware that it was an earthquake which sent him off his feet. Vacationers at Hamptons, one of the highest-rating islands, also felt the tremors. Many grabbed their cell phones to contact loved ones while other began inquiring whether a tsunami was on its way or not.

If you have Homeowners insurance, you should understand your coverage may not cover earthquake damage.  Under normal circumstances you will need to purchase an additional coverage or seperate rider to provide coverage for such perils.  If you have homeowners insurance through another company or broker and you have not been contacted lately to review your coverage – give us a call.  The agents at InsureDirect.com will be happy to review your current Home or Auto Insurance Policy and see if we can save you some money and even increase your coverage.

– Mike

 

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