Coakley Loses, but Wins Big for MA Motorcycle Owners

January 21st, 2010. By AbiK

Git your motor runnin’…The Democratic loss in Massachusetts was (is still) all over the news—but one bit of news about MA Attorney General Martha Coakley was not so prevalent: her settlement to the tune of $11.1 million with motorcycle insurers who overcharged riders.

It seems that a few motorcycle insurers—Safety Insurance Company, Liberty Mutual Insurance Company, and Quincy Mutual Fire Insurance Company—were allegedly basing their premiums for motorcycle insurance on incorrect motorcycle values.

Now, if you’ve ever had your heart set on a Harley, and had to wait to save up the money for that Fat Boy or Low Rider (personally, I’d be going for a Sportster 883 or 1200), the last thing you want to do is cough up even more money on a high insurance premium. But you’re typically at the mercy of the insurance company—you need insurance to ride, and motorcycle accidents do happen.

Upon an investigation that, according to insurancenewsnet.com, began over a year ago, it came to light that the insurance companies were basing their collision and comprehensive premiums not on the current book values of the bikes being insured, but on values that were out-of-date and inflated.

An example given was for a 1999 Harley Davidson Road King Classic (which nowadays will set you back about $18k for the 2010 base model); one of the insurers apparently calculated the Road King Classic’s premium based on a $20k value that had been set for each year from 2003 to 2008. But the bike’s book value had, in fact, gone down to less than $12k by 2008. The result? The bike owner would’ve been paying an insurance premium for his 9-year old bike that was calculated as though the bike had a $20k book value.

Now, as any Harley owner will tell you, his (or her) bike is priceless—you can’t put a value on it any more than you can put a price on freedom. But, I’ll bet any one of them would easily tell you that paying insurance on a 1999 model in 2008 that’s based on a $20k value is a bit excessive–or should I say, highway robbery–forgive the pun.

So the net of all this as reported at insurancenewsnet.com, is that Safety Insurance Company will most likely shell out $7.2 million to policyholders. Liberty Mutual will pay out $3.1 million, and Quincy Mutual will give back $800k. The insurance companies will also make payments to the state of Massachusetts totaling $510k. Average refunds to riders is expected to be about $300, with some receiving more.

So while Martha Coakley didn’t win the MA senate seat, she did win big for MA motorcyclists.

Tags: Insurance, Liberty Mutual, Massachusetts, Motorcycles, Quincy Mutual, Safety Insurance

This was posted on Thursday, January 21st, 2010 at 6:47 pm and is filed under Settlement . Feel free to respond, or trackback. Read our comments policy.